Download VTU MBA 3rd Sem 16MBAMM301-Retail Management RM Chapter 4 -Important Notes

Download VTU (Visvesvaraya Technological University) MBA 3rd Semester (Third Semester) 16MBAMM301-Retail Management RM Chapter 4 Important Lecture Notes (MBA Study Material Notes)

STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
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STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
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STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
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STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
Ret
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
Five steps in process of developing sales forecast
i. Review past sales:
ii. Analyse change in economic conditions:
iii. Changes in economic front consumer spending patterns
iv. Analysing changes in sales potential-relate the demographic changes of the market to the store and the
products
v. Analysing the changes in marketing strategies of the retail organization and competition
a) Is there a new line of merchandise to be introduced
b) need for new store
c) Existing store to be re-modeled
VI . Creating sales forecast:
Estimate of projected increase in sales is arrived
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
Five steps in process of developing sales forecast
i. Review past sales:
ii. Analyse change in economic conditions:
iii. Changes in economic front consumer spending patterns
iv. Analysing changes in sales potential-relate the demographic changes of the market to the store and the
products
v. Analysing the changes in marketing strategies of the retail organization and competition
a) Is there a new line of merchandise to be introduced
b) need for new store
c) Existing store to be re-modeled
VI . Creating sales forecast:
Estimate of projected increase in sales is arrived
Forecasting for fashion products
?Fashion scan
?Consumer analysis
?Cultural factors
?Competition
?Colour forecasting
?Textile development
?style
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
Five steps in process of developing sales forecast
i. Review past sales:
ii. Analyse change in economic conditions:
iii. Changes in economic front consumer spending patterns
iv. Analysing changes in sales potential-relate the demographic changes of the market to the store and the
products
v. Analysing the changes in marketing strategies of the retail organization and competition
a) Is there a new line of merchandise to be introduced
b) need for new store
c) Existing store to be re-modeled
VI . Creating sales forecast:
Estimate of projected increase in sales is arrived
Forecasting for fashion products
?Fashion scan
?Consumer analysis
?Cultural factors
?Competition
?Colour forecasting
?Textile development
?style
Stage 2: Determining merchandise
requirements
There are 2 methods of developing a merchandise plan
?Top down planning ?occurs when corporate objectives dictate the company?s financial objectives
?Bottom up planning: type of various stores existing, space , options needed, arrives at numbers.
Planning in merchandising is at two levels:
?Creation of merchandise budget;
1. Sales plan -How much of each product needs to be sold ;
2. Stock support plan ?how much of stock is required to achieve those sales
3. Planned reduction-if the product does not sell
4. Planned purchase levels-quantity of each product that needs to be procured from the market
5. Gross margins- how much the department contributes to the overall productivity of the company
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
Five steps in process of developing sales forecast
i. Review past sales:
ii. Analyse change in economic conditions:
iii. Changes in economic front consumer spending patterns
iv. Analysing changes in sales potential-relate the demographic changes of the market to the store and the
products
v. Analysing the changes in marketing strategies of the retail organization and competition
a) Is there a new line of merchandise to be introduced
b) need for new store
c) Existing store to be re-modeled
VI . Creating sales forecast:
Estimate of projected increase in sales is arrived
Forecasting for fashion products
?Fashion scan
?Consumer analysis
?Cultural factors
?Competition
?Colour forecasting
?Textile development
?style
Stage 2: Determining merchandise
requirements
There are 2 methods of developing a merchandise plan
?Top down planning ?occurs when corporate objectives dictate the company?s financial objectives
?Bottom up planning: type of various stores existing, space , options needed, arrives at numbers.
Planning in merchandising is at two levels:
?Creation of merchandise budget;
1. Sales plan -How much of each product needs to be sold ;
2. Stock support plan ?how much of stock is required to achieve those sales
3. Planned reduction-if the product does not sell
4. Planned purchase levels-quantity of each product that needs to be procured from the market
5. Gross margins- how much the department contributes to the overall productivity of the company
Sixth month merchandise plan
1. Prepare well in advance of selling season
2. Simple
3. Planned for a short period
4. Flexible
KEY COMPONENTS;
?Planned sales-projected sales for the period that is planned
?Planned purchases
?Planned reductions- markdowns, employee discounts and inventory shrinkage
?Planned mark-up: depends on type of product , audience and market trends.
?Final profit after paying operating costs
?Gross margin-difference between cost of product ,less reduction for markdowns , shrinkage and
employee discount
?Planning B.O.M and E.O.M
?B.O.M-relates inventory on first of the month to planned salesfor the month
?BOM inventory=planned monthly sales& desired sales/stock ratio
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
Five steps in process of developing sales forecast
i. Review past sales:
ii. Analyse change in economic conditions:
iii. Changes in economic front consumer spending patterns
iv. Analysing changes in sales potential-relate the demographic changes of the market to the store and the
products
v. Analysing the changes in marketing strategies of the retail organization and competition
a) Is there a new line of merchandise to be introduced
b) need for new store
c) Existing store to be re-modeled
VI . Creating sales forecast:
Estimate of projected increase in sales is arrived
Forecasting for fashion products
?Fashion scan
?Consumer analysis
?Cultural factors
?Competition
?Colour forecasting
?Textile development
?style
Stage 2: Determining merchandise
requirements
There are 2 methods of developing a merchandise plan
?Top down planning ?occurs when corporate objectives dictate the company?s financial objectives
?Bottom up planning: type of various stores existing, space , options needed, arrives at numbers.
Planning in merchandising is at two levels:
?Creation of merchandise budget;
1. Sales plan -How much of each product needs to be sold ;
2. Stock support plan ?how much of stock is required to achieve those sales
3. Planned reduction-if the product does not sell
4. Planned purchase levels-quantity of each product that needs to be procured from the market
5. Gross margins- how much the department contributes to the overall productivity of the company
Sixth month merchandise plan
1. Prepare well in advance of selling season
2. Simple
3. Planned for a short period
4. Flexible
KEY COMPONENTS;
?Planned sales-projected sales for the period that is planned
?Planned purchases
?Planned reductions- markdowns, employee discounts and inventory shrinkage
?Planned mark-up: depends on type of product , audience and market trends.
?Final profit after paying operating costs
?Gross margin-difference between cost of product ,less reduction for markdowns , shrinkage and
employee discount
?Planning B.O.M and E.O.M
?B.O.M-relates inventory on first of the month to planned salesfor the month
?BOM inventory=planned monthly sales& desired sales/stock ratio
Merchandise plan-open to buy
OTB-amount of new merchandise that a retailer buys without exceeding planned purchases for that period
Refers to quantity of merchandise a store should receive into inventory during a month-to keep inventories in
line with sales.
Purpose of OTB-twofold
Depending on sales of month and reductions-merchandise buying can be adjusted
Planned relation between stock and sales can be maintained
OTB ensures that buyer
i. Limits overbuying and under buying
ii. Prevents loss of sales
iii. Maintain purchases within budgeted constraints
iv. Reduces markdowns
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
Five steps in process of developing sales forecast
i. Review past sales:
ii. Analyse change in economic conditions:
iii. Changes in economic front consumer spending patterns
iv. Analysing changes in sales potential-relate the demographic changes of the market to the store and the
products
v. Analysing the changes in marketing strategies of the retail organization and competition
a) Is there a new line of merchandise to be introduced
b) need for new store
c) Existing store to be re-modeled
VI . Creating sales forecast:
Estimate of projected increase in sales is arrived
Forecasting for fashion products
?Fashion scan
?Consumer analysis
?Cultural factors
?Competition
?Colour forecasting
?Textile development
?style
Stage 2: Determining merchandise
requirements
There are 2 methods of developing a merchandise plan
?Top down planning ?occurs when corporate objectives dictate the company?s financial objectives
?Bottom up planning: type of various stores existing, space , options needed, arrives at numbers.
Planning in merchandising is at two levels:
?Creation of merchandise budget;
1. Sales plan -How much of each product needs to be sold ;
2. Stock support plan ?how much of stock is required to achieve those sales
3. Planned reduction-if the product does not sell
4. Planned purchase levels-quantity of each product that needs to be procured from the market
5. Gross margins- how much the department contributes to the overall productivity of the company
Sixth month merchandise plan
1. Prepare well in advance of selling season
2. Simple
3. Planned for a short period
4. Flexible
KEY COMPONENTS;
?Planned sales-projected sales for the period that is planned
?Planned purchases
?Planned reductions- markdowns, employee discounts and inventory shrinkage
?Planned mark-up: depends on type of product , audience and market trends.
?Final profit after paying operating costs
?Gross margin-difference between cost of product ,less reduction for markdowns , shrinkage and
employee discount
?Planning B.O.M and E.O.M
?B.O.M-relates inventory on first of the month to planned salesfor the month
?BOM inventory=planned monthly sales& desired sales/stock ratio
Merchandise plan-open to buy
OTB-amount of new merchandise that a retailer buys without exceeding planned purchases for that period
Refers to quantity of merchandise a store should receive into inventory during a month-to keep inventories in
line with sales.
Purpose of OTB-twofold
Depending on sales of month and reductions-merchandise buying can be adjusted
Planned relation between stock and sales can be maintained
OTB ensures that buyer
i. Limits overbuying and under buying
ii. Prevents loss of sales
iii. Maintain purchases within budgeted constraints
iv. Reduces markdowns
Assortment planning
Assortment-combination of all products made available in a store and set of products offered
within a product category
Assortment planning: Process of deciding upon and arriving at quantity of each product
Factors that affect the assortment planning process:
I. Type of merchandise that is stocked in the retail store:
II. Retailers policies w.r.t type of brands stored
III. Level of exclusivity
IV. Number of sku?s
V. Shelf space
FirstRanker.com - FirstRanker's Choice
STORE MANAGEMENT &
VISUAL MERCHANDISING
UNIT 5
Responsibilities of a store manager
Functions-six categories
?Managing employees
?Controlling costs
?Complying with legislation
?Store maintenance & upkeep
?Managing merchandise presentation
?Providing customer service
Role of the store manager
Customer service
oInstilling in employees importance of customer service
oPromote and monitor quality of service
oBeing approachable and available
Budgeting and planning:
oEnsure that department goals are met through appropriate planning and organisation
oDevelop and monitor capital expense budget
oProtect company?s assets and inventory
ROLE OF A STORE MANAGER
Personnel
?Hires the right people for the job
?Inspires employees
?Delegate workload appropriately and effectively
?Performance Evaluation
?Communication:
?Communicate with management
?Company policies and procedures to staff
?Hold meetings, trainngs and motivate.
Legal compliance
Compliant with all employment laws such as wage and
hour, human rights, equal employment
Safe working conditions
Ensure store security from internal and external theft
5 S of retail operations
qStock
qSpace
qStaff
qSystems : procedures on how things are done by the retailer
qStandards : standards set by the retailer in terms of service within of the store
Tasks to be performed in retail store
Administration-
oStore opening
oStore closing
oHandling Payments-Cash and Credit
oEvents and Promotions
oManagement of premises
Merchandising:
oTally, order, Replenish , Return , Display
Customer ? service, advise, returns, complaints
Store security
Store security involves two basic issues :
qPersonal security
qMerchandise security
Personal security:
Stores dealing with hazardous chemicals-post material data sheets
qCustomer security-security , metal detectors
?Bright lights in parking lots,TV cameras
?Deposit of money in banks
Merchandise Shrinkage
Shrinkage is the difference between the recorded value of inventory based on
merchandise bought and received and the value of actual inventory in stores
and distribution centres divided by retail sales during the period
oIndian retailers ?highest shrinkage (3.10%)
oOf the external shrinkage losses
o23.7 %-employee theft
o23.2%-administrative errors
o27.8% -internal fraud
oCash , coupons , vouchers , or gift cards -32.0 % internal fraud
Highest average rates of shrinkage ?apparel, clothing & Fashion accessories
(1.71%)
Vehicle ,auto parts, hardware, building material (1.70%
Cosmetics/perfumes, beauty supply pharmacy(1.66 %)
Lowest ?footwear/sports/shoes and sporting goods(0.66%), Jewellery/watches
(0.83%)
Causes of invisible shrinkages include:
?Shoplifting articles by consumers and customers
?Pilferage of merchandise and articles by employees
?Burglary and robbery during nights and off hours
Shoplifting
?Computer manipulations and mistakes. Credit card payment fraud
?Wrong reporting by purchase section
?Most common causes of shrinkage-shoplifting by customers & pilferage by
employees
?Screen employees before recruitment
?Guards checking belongings of employees
?Locks are changed periodically and keys are maintained with authorized
personnel.
Preventive Shoplifting
1. Design of store and effective placement of merchandise-curb
shoplifting effectively
2. Costly small merchandise-near store exits or dressing rooms
3. Hidden surveillance equipment such a closed circuit TV cameras
4. EAS-Electronic article surveillance
5. Adequately staffed with staff
Parking Space
Amount of parking space is measured in two ways
Total area devoted to parking by net retail area
Compute number of parking spaces per 1000 square feet of store
space
Problems related to parking space
vParking by Non shoppers
vParking space used by store employees
vInadequate parking space
Factors considered in allocating parking space
vTotal?quantity?of?parking
vSize?of?the?Parking?area
vParking?area??Location
vSingle?or?multiple?level?parking
vWalking?distance
vParking?of?its?operation;??most?common?one?is?60?degree?angle?due?to?ease?of?entry?
and?exit?in?a??sound traffic lane.?
vThe?90?degree?angle?provides?the?most?parking?area?but?it?results?in?high?level?of?
entry?and?exit?in?the?stall.
Parking Space
vParking turnover-Number of automobiles that occupy space over a
given period of time.
vAnalyse based on type of stores present.
vParking ratio: real relationship that exists actual parking area and
gross floor area
Store records
There are four sections in the process of storekeeping viz.
(a) Receiving section,
(b) Storage section,
(c) Accounting section, and
(d) Issue section.
Has to store receipts, sales records, loan statements, bank
information and past tax data
Following procedure is followed in receiving these inventories:
(i) Receiving these incoming materials in stores.
(ii) Checking and inspection of these incoming materials and stores etc.
(iii) Recording the incoming materials in goods received book.
(iv) Preparing and forwarding goods inwards note to purchasing section.
(v) Informing the purchase department about damaged and defective goods and
surplus or deficit supplies etc. along with rejection forms and notes.
(vi) Returning damaged or defective goods to the suppliers in accordance with
the instructions of the purchase department.
(vii) Forwarding the materials to respective stores and locations where these are
to be stored or preserved.
Bin cards
?It?is?an?individual?stock-keeping?record?that?holds?information?about?a?single?product?by?
lot?number?or?batch?number?.?Every?item?in?that?lot?will?have?the?same?expiration?date.?
?bin?is?a?place,?i.e.,?a?rack,?a?shelf,?almirahs?and?other?equipment's?provided?for?the?
purpose?where?goods?are?stored.
?Bin?cards-or?systematic?storing,?each?type?of?material?kept?in?different?bins,?racks,?
almirahs,?etc.
?For?each?bin?a?card?is?maintained?containing?the?materials?only?and?updated?by?the?
store-keeper.?One?card?is?attached?to?each?bin?and?the?other?remains?with?the?store-
keeper.
?A?bin?card?is?a?quantitative?record?of?receipts,?issues,?and?balances?of?materials?in?stores.
?It enables to know the quantity of materials in hand at a glance .
? Bin card maintained by the store-keeper.
?This card is used not only for recording receipts issues of stores but
also assists the store-keeper to control the stock.
?A bin card the store-keeper to prepare purchase requisition to
replenish the exhausted material.
? It also helps in locating the discrepancy when physical stock
verification; undertaken and the balance compared with bin card.
?It contains particulars such as number, description of material,
code number of material, maximum, minimum, order and danger
levels.
?Bin cards contain valuable information with regard to receipt and
issue of materials, which is greatly helpful in exercising a system of
inventory control. These cards are further helpful in determining
various levels of materials viz., maximum, minimum, and re-ordering
level.
Benefits of a Bin Card
Bin card has the following benefits or utilities:
(i) As the most important store record it gives up?to?date record of receipt, and
closes balances of items of stores.
(ii) It is helpful in placing requisitions for replenishment as when necessary. Re?
ordering quantity is also available in this card.
(iii) It makes Perpetual Inventory system meaningful by reconciling physical
stock with balance shown in the bin card.
(iv) It helps to control material cost with minimum investment as the
store?keeper keeps the stocks within the prescribed limit.
(v) It discloses at a glance to any one in the stores about the quantity balance of
stock. It helps in a system of internal check as many information relating to
store keeping is available from bin card.
Store ledger
qA stores ledger is a record of materials showings receipts, issues, and balances of materials
in quantities and value.
qIt is maintained by the Costing Department and is outside the control of store-keeper. This
ledger is maintained in order to ensure correct stores accounting.
qThis ledger is usually of loose leaf or card type and each account represents an item of
materials. The sheets are numbered serially and initiated by a responsible official so as to
avoid the risk of removal or loss.
q,the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of
folios.
qThis ledger is maintained in order to ensure correct stores accounting.
Entries are posted after the transactions take place.
Entries are posted periodically.
Entries are supported by material received note and material requisition note.
Benefits of Stores Ledger
The benefits of stores ledger are given below:
(i) It is an account record which provides information about receipt, issue and
balances both in quantity and value.
(ii) It is maintained centrally in cost office from where consolidated.:
information may be made available.
(iii) It constitutes a. check on the quantity recorded in bin card.
(iv) Frequent overall review of stores balances may be conveniently made with
the help of stores ledger.
Stock control cards
?It?is?an?individual?stock-keeping?record?that?holds?
information?about?all?the?lots?of?a?single?product
?Similar?to?bin?cards
?Maintain?quantitative?records?of?stores
?Stock?on?order
?Cabinets?or?trays
?The?inventory?control?card?may?be?a?summary?of?
?many??bin?cards?for?a?particular?product.
Techniques for recording stock
1. Periodic?verification-quarterly?,?half?early?-1?or?2?days
2. Continuous,?automatic?or?perpetual?stock?verification
known?as??the?automatic?inventory?system?,?this?method?is?designed?to?keep?a?
constant?track?of?the?quantity?and?value?of?each?stocked?item.
?Many?wholesale?distributors?leverage?a?combination?of?an?Enterprise?Resource?
Planning?(ERP)?or?Warehouse?Management?System?(WMS)?in?conjunction?with?
an?Inventory?Optimization?solution,?such?as?EazyStock,?to?optimize?inventory?
balances.
.A-quarterly,b-twice,?c-thrice
Techniques for recording stock
Spot checks
Stock out store verification-Particular inventory is stocked out
Storekeeper keeps record of such verification
Annual stock checking
LIFO
?This?method?assumes?that?inventory?purchased?last?is?sold?first.?It?uses?the?price?of?the?last?
recieved?lot?until?all?units?from?this?lot?has?been?issued?after?which?the?price?of?the?previous?
lot?received?is?used?for?pricing
?Purpose?of?assigning?costs?and?not?physical?flow?of?goods.
? Example
?Bike?LTD?purchased?10?bikes?during?January?and?sold?6?bikes,?details?of?which?are?as?follows:
?January?1?Purchased?5?bikes?@?$50?each
?January?5?Sold?2?bikes
?January?10?Sold?1?bike
?January?15?Purchased?5?bikes?@?70?each
?January?25?Sold?3?bikes
?BZU?uses?perpetual?inventory?system?to?record?purchases?and?sales?and?
LIFO?method?to?valuate?its?inventories.?The?company?has?provided?the?
following?information?about?commodity?DX-13C?and?wants?your?assistance?
in?computing?the?cost?of?commodity?DX-13C?sold?and?the?cost?of?ending?
inventory?of?commodity?DX-13C.
?Aug.?01:?Beginning?inventory;?20?units?@?$40?per?unit.
?Aug.?07:?Sales;?14?units.
?Aug.?12:?Purchases;?16?units?@?$42?per?unit.
?Aug.?17:?Sales;?8?units.
?Aug.?23:?Sales;?4?units.
?Aug.?27:?Purchases;?8?units?@?$44?per?unit.
?Aug.?30:?Sales;?10?units.
FIFO
This method assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Mar 1 Beginning Inventory 68 units @ $15.00 per unit
5 Purchase 140 units @ $15.50 per unit
9 Sale 94 units @ $19.00 per unit
11 Purchase 40 units @ $16.00 per unit
16 Purchase 78 units @ $16.50 per unit
20 Sale 116 units @ $19.50 per unit
29 Sale 62 units @ $21.00 per unit
Units?Available?for?Sale =?68?+?140?+?40?+?78 =?326
Units?Sold =?94?+?116?+?62 =?272
Units?in?Ending?Inventory =?326???272 =?54
? ? ? ?
Cost?of?Goods?Sold Units Unit?Cost Total
Sales?From?Mar?1?Inventory 68 $15.00 $1,020
Sales?From?Mar?5?Purchase 140 $15.50 $2,170
Sales?From?Mar?11?Purchase 40 $16.00 $640
Sales?From?Mar?16?Purchase 24 $16.50 $396
? 272 ? $4,226
? ? ? ?
Ending?Inventory Units Unit?Cost Total
Inventory?From?Mar?16?
Purchase
54 $16.50 $89
FIFO Periodic
Date Purchases Sales Balance
Units Unit?Cost Total Units Unit?Cost Total Units Unit?Cost Total
Mar?1 ? ? ? ? ? ? 68 $15.00 $1,020
5 140 $15.50 $2,170 ? ? ? 68 $15.00 $1,020
? ? ? ? ? ? ? 140 $15.50 $2,170
9 ? ? ? 68 $15.00 $1,020 114 $15.50 $1,767
? ? ? ? 26 $15.50 $403 ? ? ?
11 40 $16.00 $640 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
16 78 $16.50 $1,287 ? ? ? 114 $15.50 $1,767
? ? ? ? ? ? ? 40 $16.00 $640
? ? ? ? ? ? ? 78 $16.50 $1,287
20 ? ? ? 114 $15.50 $1,767 38 $16.00 $608
? ? ? ? 2 $16.00 $32 78 $16.50 $1,287
29 ? ? ? 38 $16.00 $608 54 $16.50 $891
? ? ? ? 24 $16.50 $396 ? ? ?
Highest in first out method
The?inventory?with?the?highest?cost?of?purchase?is?the?first?to?be?used?or?taken?out?of?stock.?
Inventory?that?is?recorded?as?used?up-most?expensive?inventory
Suitable??constant?fluctuation
Next in first out:
Here?materials?issued?are?valued?at?the?price?quoted?on?the?latest?purchase?order?until?anew?
order?is?placed.
Standard price:
Materials?are?issued?at?a?standard?price.
Specific price method:
Under?this?method?materials?are?issued?at?the?price?at?which?they?were?originally?purchased.?
It?is?suitable?for?job?industries?which?carry?out?individual?jobs?or?contracts?against?specific?
orders.

Moving simple average price method:
Rate for material issues is calculated by dividing the total of periodic simple average prices of a
given number of periods by the number of periods.
Periodic simple average method:
Average price is calculated periodically
Total of purchase prices during the period/No of prices during the period
Moving weighted average method:
Weighted average is computed by dividing total amount by total quantity.
Replacement method:
It is one at which material can be replaced by purchase from the market.
Here cost of the materials in hand is not considered. When an issue is made the market price is
ascertained and the issue is priced at that price.
Base stock method:
The method is based on the contention that each enterprise
maintains at all times a minimum quantity of materials or finished
goods in its stock. This quantity is termed as base stock. The base
stock is deemed to have been created out of the first lot purchased
and, therefore, it is always valued at this price and is carried forward
as a fixed asset.
Inflated price method:
In case the material suffers loss due to its inherent nature,the price of the
material is inflated to cover losses.

Coding system : Bar code
Barcode:
Graphical representation of a code enables a scanning device to transmit this code
to the database where further information about the product, price, size or
dimensions and they can be re-transmitted back to a computer monitor that can be
read.
Benefits:
?Improves operational efficiency
?Saves time
?Reduces errors
?Cuts costs
Limitations
qPricing Discrepancies and Scanning problems
qLabel damage
qFinancing and equipment costs-Training, Printer
requirements
Material handling
? A right method to provide right amount of right material at the right place at the right
time, in the right sequence, in the right position, in the right condition and cost.
Activities covered in Material handling
1. Shipping
2. In storage handling
3. Shipping
Storage activities:
Planned storage: Basic inventory replenishment
Extended storage: inventory in excess of planned storage for normal warehouse
operation
Importance of good material handling
vRegular product movement
vSpace availability
vReduces Idle labour time
vImproves customer service
Factors affecting modern store
management
Distance
Customer loyalty
Purchase intention
Customer satisfaction
Perceived value factors-customer value triad
Store assortment
Socio-economics
Key components of retail atmospherics
1. Exterior atmospherics
2. Interior atmospherics
3. Store layout
4. Visual merchandising
Key components of retail atmospherics
Atmospherics
Design of an environment with the help of visual communications, lighting ,
color ,music , and scent to stimulate customers perceptual and emotional
responses and thereby influences customer behavior.
Aesthetics:
Actual size of the store, colors, texture used to create a particular look and feel
of the store
Principles of store design
?Totality
?Focus
?Ease of shopping
?Change and flexibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
Elements of retail store atmospherics
Exterior Atmospherics
?Storefront
?marquee
?Entrances
?Display windows
?Size of building
?Visibility
?Adjoining stores
?Parking
?Accessibility
INTERIOR ATMOSPHERICS
oFLOORING
oLIGHTING
oODOUR
oFIXTURES
oWALLS
oTEMPERATURE
oTRIAL ROOMS
oPERSONNEL
oCLEANLINESS
Interior store design is a function of
?aesthetics within the store
?Merchandise sold within and the space used for
the same
?Overall layout of the store
?Key factors
?-space planning
?-Atmospherics and aesthetics:
1. Fixtures-tables,racks,shelves,gandolas
2. Flooring and ceiling
3. Lighting
4. Graphics and signages
Theme graphics
Campaign graphic
Promotion graphics
Signages
Merchandise related ?informs customers about the location,prices or features
Directional signs-cash counters, customer service area
Instructional signs-caution boards,
Courtesy signs-visit again
Store directory-informs customer about location of various section of the store.
Window display
STORE LAYOUT
qInterior retail store arrangements of departments or grouping of merchandise
qFLOOR SPACE ALLOCATION FOR SELLING
qCUSTOMERS
qTRAFFIC FLOW
qDEPARTMENT LOCATION
qSPACE/MERCHANDISE CATEGORY
qSIGNAGES
Display is in the form of racetrack or loop with a major aisle running through the store.
Aisle provides various shop in shops or departments within the store.
RetLayout selection-chief considerations
?Selecting a store which allows for complete presentation og the
merchandise to the customer
?Striking the right balance between displays and service areas
?While designing store needs of women,elderly,children need to be
kept in mind
?the merchandise and target audience
VISUAL MERCHANDISING
vASSORTMENT
vTHEME
vRACKS AND SHELVES
vPAYMENT COUNTERS
Purpose:
1. Enhance sales
2. Create store image
3. Ease of shopping ,to inform and communicate
Tools used in visual merchandising
1. Colors & textures
2. Props and fixtures
?Grid display
?Counter displays
?Gondolas and end caps
?Lighting
?Mannequins
Planogram
?Tool used by a retailer to determine the location of merchandise
within the department.
?Product sales,
?Movement of products within category
?Space required for various products.
?Methods of displays
?Colour dominance
?Co-ordinated presentation
?Presentation price
Common errors in display
?Clutter
?Lack of an underlying theme
?Too many props
?Dirty props
?Poor lighting
Customer relationship management
What is CRM?
Process of collecting information and aligning and remodeling the organisations strategy to
meet the customers demand
Refers to the activities an enterprise performs to identify, select, acquire, develop and retain
increasingly loyal and profitable customers
Customer service
Karl Albrecht and Ron Zemke introduced concept of service triangle
Importance of service in retail
Interlocking efforts of keeping customers
1. Put customer at the heart of your business
2. Manage the business from the customers point of view
3. Manage quality
4. Keep the relationship vibrant
5. Manage service recovery
6. Convert customer satisfaction into profit
Principles/steps of distinctive customer
service
1. Identify its key customers, listen and respond to them
2. Define superior service and establish a service strategy
3. Set standards and measure performance.
4. Select train and empower employees to work for the customer
5. Recognise and reward accomplishment
Components of CRM Strategy
Personalization benefits
Special treatment benefits
Rewards
Communication benefits
Types of customer service in retailing
Pre-transaction service: convenient hours, information aids
Transaction services: credit, gift wrapping , packaging, gift cards, personal selling
Post transaction
Retail selling process
Acquiring product/merchandise knowledge
Studying the customer
Approaching the customer
Presenting the merchandise
Overcoming resistance
Suggestive selling
Closing the sale
Customer needs Retailer traditionally provides How crm benefits customer
Product choice Range selection Tailored
access Channel choice Consistent experience
support information Enhanced service
Individual treatment Customer service 1:1 relationship
Value Efficiency Customer defined value
Salesperson-informer, counsellor, public relation
executive, mover of stock, seller
?Starting point of an effective crm programme is
identify customer segments into
?Lower value
?Growable
?Most valuable
Measuring gaps in service
qKnowledge gap: what the consumer expects of service and what management believes of
consumer expectations
qStandards gap : What the management perceives the customer to expect and the quality
specifications set for delivery
qDelivery gap: quality specifications set for service delivery and actual quality of service delivery
qCommunication gap: difference between the service the firm promises to deliver to external
communications and service actually delivered
What is Loyalty program?
?A?loyalty program?is?a?rewards program?offered?by?a?
company?to?customers?who?frequently?make?purchases.?
A?loyalty program?may?give?a?customer?advanced?access?to?
new?products,?special?sales?coupons?or?free?merchandise.
Loyalty programs
Bases
oLoyal customers are cheaper to serve
oWilling to pay more for a bundle of offering
oAct as effective marketers for store?s offerings
Requirements
o Customers to enroll
oRewards, discounts,or services based on customers spending
pattern
oBenefit customers can receive from specific purchasing
behavior
Types of loyalty programmes
1.Multi sector and single sector loyalty programmes:
Partnered loyalty programmes can be multi sector when the various partners to the loyalty
programmes they belong to different sectors of the industry
SBI ?Freedom rewardz
Network partners-koutons , the mobile store , provogue,orra ,Nirula?s Gini and Johny
Single loyalty programmes:
If all the partners belong to the same sector
2.Single and multi partner programmes
These programmes are owned by a single operator , but members of such programs can collect
points when buying from various partners in the programme . Eg: frequent flyer programmes
LOYALTY PROGRAMMES
3. True coalition programmes
Management is independent of any of the partners.The partners have contracts with operator
and redeem the currency of the programme and have access to the data harvested by the
programme through its operator.
4. Affinity loyalty programme:
?Based on concept of marketing goods and services to a group of individuals with common
interests
?Target a product to a member of the group using endorsement of the organization and channel
of communications
Characteristics of good loyalty program
1. Visibility: highly visible regardless of channel
2. Simplicity
3. Value : motivate incremental purchases
4. Trust
Concept of merchandise planning
Planning and control of merchandise inventory of the firm which balances between expectation
of the target customer and strategy of the firm
Merchandise management is planning, procurement,handling and control of merchandise
investments of retail firm.
qFactors affected by merchandise strategy:
qProduct mix
qRange and assortment mix
qMethod of sourcing
qQuality
qprice
Components of merchandise
management Components of merchandise mix
Merchandise analysis:
?What image to create?
?Understand demographics
Merchandise Planning : establishing objectives and devising plans for obtaining merchandise
well in advance of the selling season
Establish performance guidelines
Merchandise control : how well one is following guidelines
Design policies and procedures to meet the goals
Acquisition & handling :Physical purchase of products and transportation to outlets.
Process of merchandise management Buying cycle
vDetermine product requirement
vSelect suppliers
vVendor negotiations
vProduct pricing
vFollow up
vAllocate the product
vMonitor response-take correction action
1. Need to know where the product moves-sales records
2. Refer external sources of information
3. Conduct Analysis
Types of merchandise
vStaple/Basic?merchandise-products?always?in?demand
vFashion?merchandise-?high?demand?for?a?relatively?short?period?of?time
Eg?:?Jeans,?kurtas
vSeasonal?merchandise-products?that?sell?over?non?consecutive?time?periods;eg:rain?wear
vFad merchandise?is?the?merchandise?items?that?generate?a?high?level?of?sale?for?a?short?period?of?
time.
vAssortment-Selection?of?merchandise?by?the?retailer
vVariety?of?merchandise-number?of?different?lines?that?a?retailer?stocks?in?the?store;
Collection?of?children?s?wear
vWidth?of?assortment-number?of?merchandise?brands?in?the?merchandise?line
vDepth-average?number?of?SKU?s?within?each?brand?in?the?merchandise?line
vConsistency-how?closely?related?or?compatible?the?product?line?are?in?terms?of?purchasing?habits?
and?use.
MERCHANDISE HIERARCHY
MERCHANDISE IS CLASSIFIED AS
Ist level
?Fresh groceries
?Ready to eat- snacks, biscuits
?Additive- masala, pickles
?Personal hygiene products
?Cooking aids ? like ready pastes
?Necessities like dal , sugar , oil ,atta
?Soft drinks/juices
?2
nd
level : various categories of products that the retailer offers in every department
?In ready to eat- biscuits , chips, wafers, branded snacks like haldiram category level-merchandise class
qChips , wafers- salted,flavoured,branded sub category or sub class
qStyle/pack size and price point
qSKU
MeMerchandise
Company
Department
product line
category
sub category
style
price point
SKU
Process of merchandise planning
1. Developing sales forecast
2. Determining merchandise requirements
3. Merchandise control-OTB
4. Assortment planning
Process of merchandise planning
Stage 1:Developing sales forecast:
oArrived at based on sales targets
oFirst step in determining inventory needs of the product or category.
oDeveloped to answer the following
1. How much of each product will need to be purchased?
2. Should new products be added to merchandise assortment
3. What price will be charged for the product
oUsually made for a specified period and person who makes it should be aware of
a) Changes in tastes and attitudes of consumers
b) Size of target market
c) Changes in their spending patterns
Five steps in process of developing sales forecast
i. Review past sales:
ii. Analyse change in economic conditions:
iii. Changes in economic front consumer spending patterns
iv. Analysing changes in sales potential-relate the demographic changes of the market to the store and the
products
v. Analysing the changes in marketing strategies of the retail organization and competition
a) Is there a new line of merchandise to be introduced
b) need for new store
c) Existing store to be re-modeled
VI . Creating sales forecast:
Estimate of projected increase in sales is arrived
Forecasting for fashion products
?Fashion scan
?Consumer analysis
?Cultural factors
?Competition
?Colour forecasting
?Textile development
?style
Stage 2: Determining merchandise
requirements
There are 2 methods of developing a merchandise plan
?Top down planning ?occurs when corporate objectives dictate the company?s financial objectives
?Bottom up planning: type of various stores existing, space , options needed, arrives at numbers.
Planning in merchandising is at two levels:
?Creation of merchandise budget;
1. Sales plan -How much of each product needs to be sold ;
2. Stock support plan ?how much of stock is required to achieve those sales
3. Planned reduction-if the product does not sell
4. Planned purchase levels-quantity of each product that needs to be procured from the market
5. Gross margins- how much the department contributes to the overall productivity of the company
Sixth month merchandise plan
1. Prepare well in advance of selling season
2. Simple
3. Planned for a short period
4. Flexible
KEY COMPONENTS;
?Planned sales-projected sales for the period that is planned
?Planned purchases
?Planned reductions- markdowns, employee discounts and inventory shrinkage
?Planned mark-up: depends on type of product , audience and market trends.
?Final profit after paying operating costs
?Gross margin-difference between cost of product ,less reduction for markdowns , shrinkage and
employee discount
?Planning B.O.M and E.O.M
?B.O.M-relates inventory on first of the month to planned salesfor the month
?BOM inventory=planned monthly sales& desired sales/stock ratio
Merchandise plan-open to buy
OTB-amount of new merchandise that a retailer buys without exceeding planned purchases for that period
Refers to quantity of merchandise a store should receive into inventory during a month-to keep inventories in
line with sales.
Purpose of OTB-twofold
Depending on sales of month and reductions-merchandise buying can be adjusted
Planned relation between stock and sales can be maintained
OTB ensures that buyer
i. Limits overbuying and under buying
ii. Prevents loss of sales
iii. Maintain purchases within budgeted constraints
iv. Reduces markdowns
Assortment planning
Assortment-combination of all products made available in a store and set of products offered
within a product category
Assortment planning: Process of deciding upon and arriving at quantity of each product
Factors that affect the assortment planning process:
I. Type of merchandise that is stocked in the retail store:
II. Retailers policies w.r.t type of brands stored
III. Level of exclusivity
IV. Number of sku?s
V. Shelf space
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