The two pillars of efficient retailing

Organised retail in India has arrived. But a lot needs to be done to establish its feet firmly into the soil. Efficient retailing is the call of the day. A look at how retailers can adopt it…
Retail-Business-Practice

The temptation of expansion given the right investments can be risky for an entrepreneur who has not devoted enough time and effort to the two pillars of efficient retailing, namely, planning and execution. A dislike for systems and processes is what coaxes business owners into overlooking the planning stage, which if taken care of well, can ensure a flawless execution of the business plan/expansion. 

It is a science
Many would agree that the far-reaching ever-growing domain of retail is quite a maddening one. But there is a method to the madness, something that entrepreneurs still need to get a grip of. Well known retail expert Hemchandra Javeri – Co-Founder and Director Forum Synergies says, "We Indians have retailing in our DNA, but still need to use the science of retailing." Like Javeri, many retail experts would concur that retailing is a science, with its own set of methodology, experiments and observations (the conclusions to which are akin to sales reports, etc). The key point here is that it is incorrect to presume that the right location, investment and a business degree would reap profits. Retailing and that too efficient retailing is still a long way ahead. 

Efficient retailing
The recent economic growth of India in the retail sector has inspired many entrepreneurs to start their businesses, whilst it has spurred international expansion for quite a few national players. The lure of adding a few extra square feet of floor space should not encourage a retailer to neglect the need for detailed planning, the result of which would be faultless execution. These are also undoubtedly the two pillars of efficient retailing. Javeri points out that, "There is a need for efficient retailing in India and planning and execution are the two stages that need utmost care; planning more than anything." 

Planning
It will be unfair to say that this stage of retailing is seldom neglected. But it is not far from the truth to assume that it is not an in-depth affair. Apart from the finance required, the site and goods to be delivered, the planning stage requires the retailer to clearly chalk-out his/her revenue in terms of fixed costs, variable costs and sales estimate. Revenue evaluation is critical and needs utmost sensitivity and diligence. The business owner also needs to optimise the fixed costs before starting. Store viability and an on-table available report of the estimated footfall is also something that the retailer should have before starting out the business. Training costs, IT solutions program and its implementation costs should also be well taken care of before the execution stage. 

Execution
The execution stage is the actualisation of the retailer’s vision. A lot of dreams have been seen before this stage. For those dreams to reach fruition the retailer needs to lay an emphasis on customer relations, data, training, monitoring and rewarding of staff and evaluation of business plans. The key to good retailing is to know what the customer wants. G Pandrang Row, Vertebrand, says “Emotion is the key to consumer behaviour.” A discerning retailer should tap that and insist on complete data of all his customers, which should include how many times has the customer shopped with them, what (s) he bought, preferences and dislikes, so on and so forth. Training costs should never be cut down to meet other expenditures at the business end. The investment in training will eventually spell profit, and an ill-trained staffer will not only decrease sales but could also incur losses. Lastly, salespeople/staff should be monitored, checked regularly and rewarded large-heartedly. A happy staffer can spin magic for the store, this goes without saying. 

Agreed Indian retailing has a long way to go, and this probably is an advantage because it allows time for improvement to attain perfection. And retailers in India are slowly realising that the secret to success of numerous international retailers is nothing but efficient retailing. 
 

 

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