Retail matrix for beginner
- 1. Matrix
- 2. Important Aspects of Store Operations Customer Service On Shelf Availability In Store Process Sta ff Planning and Motivation A Business Management Co.
- 3. Manager’s Role in Strategy Vision & Strategic Goals Target Positioning People Management In Store Marketing Merchandising Customer Relations In Store Ef fi ciency A Business Management Co.
- 4. Responsibility of Store Manager Human Resources Ef fi ciency Store Business Operations Inventory Management Team Development & Motivation Customer Service Sales Generation Safety & Security of Store Division of Responsibility Pro fi t Generation Optimised Critical Important A Business Management Co.
- 5. Retail Mathematics Understand Di ff erent Calculations in Day to Day Retail Operations Average Transaction Value ( ATV) Average Basket Size Per Sq. Ft. Per Day Revenue Footfall & Conversions Margin / Gross Pro fi t ( GP) Growth Accessories Attachment Ratio Average Age of Inventory Average Value of Inventory Break-Even Analysis Cost Of Goods Sold (COGS) Sell-Through Rate Net Sales Inventory Turnover (Stock Turn) A Business Management Co.
- 6. • This help us too know the average amount of purchasing done by a customer in a particular retail store. • To Increase the Value of average bill size, the sales team should concentrate to selling high price products and also sell more products in each billing. Formula - Average Bill Size = Total Sales Revenue / No of Bills Average Bill Size A Business Management Co.
- 7. Per Sq. Ft. Per Day Revenue • This help us to analyse the optimum utilisation of space in a retail store. • To Increase Value of Per Sq.Ft. Per Day, We should make sure that every part of store space is being utilised e ffi ciently. Regular changes in display may be required. Formula - Per Sq.Ft. Per Day = Per Day Total Sales Revenue / Total Sq.Ft. Area of Store. A Business Management Co.
- 8. • This help us to know the average numbers o ff products being sold in each bill, in a retail store. • To Increase Value of average basket size the sales team should concentrate on selling more products in each bill. Each Person should try to do add on selling and Cross selling Formula - Average Basket Size = Total Quantity Sold / Number of Bills Average Basket Size A Business Management Co.
- 9. Accessories Attachment Ratio • Every Store targets a particular percentage of Accessories attachment of their store in comparing to their total Sales revenue. Considering factors like in fl ation, increase in manpower, Advertisement costs and other external factors. For Example - Attachment Ratio = Total Accessories / Total Sales A Business Management Co.
- 10. Average Age of Inventory • The average age of inventory helps purchasing Team to make buying decisions and management to make pricing decisions. As a fi rm's average age of inventory increases, its exposure to obsolescence risk also grows. Obsolescence risk is the risk that the value of inventory loses its value over time. • If a fi rm is unable to move inventory, it can take an inventory write-off for some amount less than the stated value on a fi rm's balance sheet. (Loss) The formula to calculate the average age of inventory is Average age of inventory= C / G ×365 where: C = the average cost of inventory at its present level G = the cost of goods sold (COGS) A Business Management Co.
- 11. Open to Buy (OTB) • Ope to Buy (OTB) is the di ff erence between how much inventory is needed and how much is available. That includes inventory on hand, in transit, and any outstanding orders. Formula - OTB (retail ) = Planned Sales + Planned Markdowns (if Any) + Planned End of Month Inventory - Planned Beginning of Month Inventory A Business Management Co.
- 12. Stock to Sales Ratio • Stock-to-sales ratio is the beginning-of-the-month- stock to the number of sales for the month. The key takeaway is that this ratio is a monthly metric. Formula - Stock-to-Sales = Beginning of Month Stock ÷ Sales for the Month A Business Management Co.
- 13. Inventory Turnover (Stock Turn) • Inventory turnover is how many times during a certain calendar period a retailer sells its inventory and replaces it. Formula :- Turnover = Net Sales ÷ Average Retail Stock A Business Management Co.
- 14. Margin/ Gross Pro fi t (GP) • It is a di ff erence between the sales price and the cost price of a product. • When a retail store o ff ers discount or o ff ers on a product, the margin gets reduced, but the overall earnings are increased due to the increased volume of sales triggered because of the discounts. Formulas - Margin = Sales Price - Cost Price Margin % = Sales Price - Cost Price ÷ Sales Price * All Prices are Without Tax A Business Management Co.
- 15. Footfall & Conversions • This help us to know the percentage of walk in customers, Who are actually buying from the Store. For Example, if 100 Customers are walking into Store, then what is the percentage of people who are actually buying from the store. • To Increase the conversation ratio, it is important that all customers are attended properly, leading to sales or conversion. Formula - Conversion Ratio = Number of bills ÷ Total Walk Ins x 100 A Business Management Co.
- 16. Growth • Growth of every retail store is measured by comparing its sales of the last year, with sales of this year at the same time. • Every Store targets a particular percentage of growth every year, Considering factors like in fl ation, increase in manpower, Advertisement costs and other external factors. For Example - YoY = Sales of FY2019 - Sales Of FY 2018 ÷ Sales Of FY 2018 MoM = May 2019 - April 2019 ÷ April 2019 QoQ = Current Qtr - Previous Qtr ÷ Previous Qtr A Business Management Co.
- 17. Average Value of Inventory • This can be fi gured by taking an item price and subtracting discounts, plus freight and taxes. The average is found by adding the beginning cost inventory for each month plus the ending cost inventory for the last month in the period. If calculating for a season, divide by 7. If calculating for a year, divide by 13. Here's a cost example: If a store has an average inventory of ₹ 100,000 and the cost of goods sold is ₹ 200,000, then you would divide ₹ 200,000 by ₹ 100,000 to give you a ratio of 2:1, which can be expressed simply as 2. Formula - Average Inventory (Month) = (Beginning of Month Inventory + End of Month Inventory) ÷ 2 A Business Management Co.
- 18. Break-Even Analysis • This is the point in your retail business where sales equal expenses. There is no pro fi t and no loss. For example, for a retail store, rent is likely to be the same regardless of the number of units sold. Formula - Break-Even (₹) = Fixed Costs ÷ Gross Margin Percentage A Business Management Co.
- 19. Cost Of Goods Sold (COGS) • This is the price paid for a product, plus any additional costs necessary to get the merchandise into inventory and ready for sale, including shipping and handling. This method is pretty straight-forward, and very easy to use and implement in a low-volume, high-cost-per-item retail format. A Business Management Co.
- 20. Sell-Through Rate • This fi gure is a comparison of the amount of inventory a retailer receives from a manufacturer or supplier to what is actually sold and is typically expressed as a percentage. Formula - Sell-Through % = Units Sold ÷ Units Received A Business Management Co.
- 21. Net Sales • Net sales is the number of sales generated by a business after the deduction of returns, allowances for damaged or missing goods, and any discounts allowed. Formula - Net Sales = Gross Sales - Returns and Allowances A Business Management Co.
- 22. Components of Pro fi t & Loss ( P&L) Revenue EBIT Cost P&L A Business Management Co.
- 23. Basic of Pro fi t & Loss ( P&L) Net Margin Total Other Income Revenue + - = = Total Revenue Total Expenses Store EBIT A Business Management Co.
- 24. Understanding P&L Terms Store EBIT = Earnings Before Interest and Tax Expense = Employee Salary, Store Rent, Electricity Charges, Marketing Cost, Maintenance Cost, Stationary etc Income = Income from Sales Margins, Service Charges, Trainings etc. Deprecation = Deprecation is reduction in the value of an asset over time. A Business Management Co.
- 25. Retail Customer Experience A Business Management Co.
- 26. Retail Customer Experience A Business Management Co.
- 27. Conversation Model Conversation Model A Business Management Co.
- 28. Retail Customer Experience A Business Management Co.
- 29. One Basic Principle of life. if This principle is Followed with full spirit, Leads to wonders & Exponential growth. Learn from mistakes Encourage doing mistakes BUT not repeating the mistake. A Business Management Co.
- 30. • Warm and Laud Welcome • Introduction of self • Helping attitude then selling approach • Never say NO for any thing, Find alternative positive answer • Suggest useful accessories, Cross Sales and Up sales, • Customer Experience A Business Management Co.
- 31. Every store has a di ff erent culture whether you realise it or not. Culture is a living, breathing part of your store. It exists whether you're dealing with it or not. Culture either controls you or you control it. But the bottom line is that if you are not addressing the culture in your retail store, then you are making your job much harder. Your culture is made up of the values, beliefs, and behaviours of you and your employees. In fact, it's the one part of your business that will undo any new policy, practice or standard you may try and implement. In other words, the store manager "preached" about how important a sales process was, but when he or she was on the sales fl oor, did not follow it themselves. Culture evolves and develops in a cycle. The reason this is signi fi cant is that if you try and change the attitudes of your employees (like many managers do) the culture cycle proves that it will not work. You have to change the beliefs and values in order to change the attitudes. Everything speaks in your culture. Every sign you make, every policy you pass, every decision you make re fl ect the true beliefs and values you adopt as a business. Take some time to examine your vision for the store, and then examine the culture and see if it is aligned. Store Culture A Business Management Co.
- 32. Below are the things which we expect our Managers to do when it comes to their personal dressings. Top: Any ironed formal shirt ( Preferred Plain White or Black), without any written embroidery, is acceptable. Shirts should be spotless( only small brand logo on shirt is acceptable) Bottom: Plain Blue and Black jeans are “preferable” , if manager decides to wear formal trouser than black, grey, navy blue or any dark colour is “preferable’(No rough looks jeans and skinny jeans are allowed) Foot: Preferable good brand sneakers and if wearing formal trouser than formal shoes are preferable. (Formal shoes should be fl at or should have minimal heels). Clean Shoes are necessary. Grooming: Hair should be stylish and medium, Daily clean shaved is most preferable (If beards for religious reasons, then it should be nicely shaped and trimmed daily) and body should smell nice all the time. Use of hair gel, wax , deodorant and perfume are permitted. Smokers: If you smoke, then please do it on certain time, and always carry a mouth fresher, so that your breath are not smelly. Employee Presentation A Business Management Co.
- 33. You may have a to-do list with 50 tasks on it, so you need to prioritise those tasks into four categories. They are: • Urgent and important • Important but not urgent • Urgent but not important • Neither urgent nor important. Prioritise Your Time
- 34. A Business Management Co. Thank You