Core processes in Retail

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Retailing is the vital link in any typical supply chain as it is closest to the customers. Retailing adds value in terms of bulk breaking, providing a wide assortment of goods, and incidental services to customers. The value chain and core processes involved in retail are given below.

 

1.    Store Operations:

Store operations play a critical role in shaping the customer perceptions towards the store/mall. Store operations involve selling, management of goods flow, store maintenance, customer service and transaction processing. The sales person plays an important role in technology goods, high value high involvement goods such as jewellery, watches, etc. Customer service includes delivery, repair, warranty work and handling of customer returns, etc.

 

2.    Merchandising:

It involves selecting and displaying of the assortment of goods to be sold. The right mix/kind of merchandise plays an important role in selection of a particular store by the customer and is a key differentiating factor. It is a dynamic activity which has to be in resonance with customer trends and also has implications for the top-line and bottom-lines of a retail outlet.

 

3.    Logistics:

The infrastructure bottlenecks in India i.e., road conditions, lack of strong cold chains, poor warehousing facilities, are well documented. These bottlenecks add up to the logistics cost both in terms of time and money. Logistics plays an important role for Organized Retail as the economies of scale are mainly on account of centralized sourcing systems. The high logistics cost also forces the retailers to trade off between availability of goods to the customer and high inventory costs.

 

4.    Marketing:

Marketing strategies of a firm shape both the pulling the target audience to the store through advertising and pushing merchandise to the customers through sales promotion programmes. The challenge for Organized Retail is to ensure both high footfalls and conversion ratio. Increasing the average transaction size is one of the main concerns for a retail outlet. Effective CRM strategies such as loyalty programmes play an important role in achieving the aforementioned objectives.

 

5.    Purchase:

Centralized purchasing is important for the organized retailers to get advantage of their scale of operations. Retailing often involves a number of products and SKUs which make this task even more difficult. Purchasing function has to work in co-ordination with logistics and merchandising. The function also takes care of Vendor selection and development.

 

6.    Corporate services:

Corporate services are support functions such as Finance, HR, IT, Administration. IT and HR functions are increasing in importance. IT plays a key role in improving the efficiency as well as CRM activities.

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