Class Retail 9

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Customer Service and Retail Selling

High-quality service - A service that meets or exceeds customers’ expectations.

A way in which retailers provide the high-quality service expected and reduce customer defections is through relationship retailing programs.

Relationship retailing programs - The activities designed to attract, retain, and enhance long-term relationships with customers


Retailers can develop long-term relationships with their customers by offering:

financial benefits

social benefits


3 Basic Tasks for Retailers:

Get customers into your store

Convert them into customers

Operate efficiently


Customer service consists of all those activities performed by the retailer that influence:

the ease with which a potential customer can shop or learn about the store’s offering.

the ease with which a transaction can be completed once the customer attempts to make a purchase.

the customer’s satisfaction with the transaction.


Transient customer - An individual who is dissatisfied with the level of customer service offered at a store or stores and is seeking an alternative store with the level of customer service that he or she thinks is appropriate.


Customer service must be integrated into all the following aspects of retailing:

Merchandise management

Building and fixture management

Promotion management

Price management

Credit management

Pretransaction services - Provided to the customer prior to entering the store: Convenient hours; Information aids


Transaction services - Provided to customers when they are in the store shopping and transacting business: Credit; Layaway; Gift wrapping and packaging; Check cashing; Gift cards; Personal shopping; Merchandise availability; Personal selling; Sales transaction

Personal shopping - An individual who is a professional shopper performs the shopping role for another; very upscale department and specialty stores offer personal shoppers to their clients.

Dwell time - The amount of time a consumer must spend waiting to complete a purchase.


Posttransaction services - Provided to customers after they have purchased merchandise or services.

Complaint handling; Merchandise returns, which includes: Renting, not buying; Fraudulent employee actions; Shoplift returns; Price switching

Servicing, repair, and warranties; Delivery; Postsale follow-up


Factors to consider when determining level of customer service:

Retailer's characteristics; competition; type of merchandise; price image of store; income of target market; cost of providing service


Balance between vendor expectations, and customer expectations, with regard to Retailer's Sales Force.

Retail Sales Management

Types of retail selling

Retailers that concentrate on the sale of shopping goods want their salespeople to both get and take orders.

In lines of retail trade where predominantly convenience goods are sold, the role of the salesperson is that of an order taker.

It is generally true that retailers with high margins and high levels of customer service place more emphasis on order getting; those with low margins and a low customer service policy tend to emphasize order taking.


Salesperson selection

Hiring criteria

Predictors

Demographics

Personality

Knowledge and intelligence

Experience


Salesperson training

Retailer’s policies

Merchandise

Customer types

Customer choice criteria: No active product choice criteria; Inadequate or vague choice criteria; Choice criteria in conflict; Explicit choice criteria


Evaluation of salespeople

Performance standards: Conversion rate; Sales per hour; Use of time (Selling time, Nonselling time, Idle time, Absent time)

Data requirements


Conversion rate - Percentage of shoppers that enter the store that are converted into purchasers.

Sales per hour is computed by dividing total dollar sales over a particular time frame by total salesperson or sales-force hours.


Retail Sales Process:

Prospecting; Approach; Sales Presentation; Closing Sale; Suggestion Selling

Prospecting - Locating or identifying potential customers who have the ability and willingness to purchase your product.

Closing the sale - Action the salesperson takes to bring a potential sale to its natural conclusion.

(examples with book)


The Customer-Service and Sales-Enhancement Audit

The objectives of the audit

Identify the service, salesmanship, and sales-enhancement methods that will produce more sales from the existing shopping traffic.

Target the methods by store and selling area that will produce the most significant improvements.

Determine the added sales that can be generated by improving the accepted service level, salesmanship, and sales-enhancement programs.


Advantages of the audit:

Provides management with a detailed analysis of current sales activity by location and by selling area.

Identifies how and where additional sales volume is available.

Measures, analyzes, and reports on the specific factors.


Store Layout and Design

Elements That Compose�the Store Environment

Visual Communications (Retail identity, graphics, signage); Store Planning (space allocation, layout, circulation); Store Design (exterior design, ambience, lighting); Merchandising (fixture selection, merchandise presentation, visual merchadising)

Objectives of the store environment

Developing a store image

Increasing space productivity


Store Planning:

Floor plan - A schematic that shows where merchandise and customer service departments are located, how customers circulate through the store, and how much space is dedicated to each department.

Microretailing - Occurs when a chain store retailer operating over a wide geographic area, usually nationally, tailors its merchandise and services in each store to the needs of the immediate trading area.

Stack-outs - Pallets of merchandise set out on the floor in front of the main shelves.

Allocating space

Types of space needed: Back room; Offices and other functional spaces; Aisles, service areas, and other nonselling areas; Floor merchandise space; Wall merchandise space

Circulation

Shrinkage prevention


Space allocation planning

Improving space productivity in existing stores: Space productivity index - A ratio that compares the percentage of the store’s total gross margin that a particular merchandise category generates to its percentage of total store selling space used.

Space allocations for a new store

Planograms - A schematic that illustrates how and where a retailer’s merchandise should be displayed on the shelf in order to increase customer purchases.

Circulation: Free-flow layout; Grid layout; Loop layout; Spine layout


Planning Fixtures and Merchandise Presentation

On-shelf merchandising - Display of merchandise on counters, racks, shelves, and fixtures throughout the store.

It must present and display the merchandise attractively so that it is easy to understand and access.

It must be reasonably easy to maintain.

Fixture types

Merchandise-presentation planning

Selecting fixtures and merchandise-presentation methods

Visual merchandising


Fixture Types:

Hardlines fixtures

Softlines fixtures Bulk or capacity fixture - Display fixture that is intended to hold the bulk of merchandise without looking as heavy as a long, straight rack of merchandise.

Feature fixture - Display that draws special attention to selected features (e.g., color, shape, or style) of merchandise.

Wall fixtures


Merchandise Presentation Planning

Shelving; Hanging; Pegging; Folding; Stacking; Dumping

Key psychological factors to consider when merchandising stores: Value/fashion image; Angles and sightlines; Vertical color blocking


Selecting Fixtures and Merchandise-Presentation Methods

Proper fixtures emphasize the key selling attributes of merchandise while not being overpowering.

A good guideline for selecting fixtures is to match the fixture to the merchandise, not the merchandise to the fixture.


Visual Merchandising

The artistic display of merchandise and theatrical props used as scene-setting decoration in the store.

Visual displays are located in a focal point, feature area, or other area remote from the on-shelf merchandising and perhaps even out of reach of the customer.

Visuals should incorporate relevant merchandise.

Mannequin's


Store Design

Storefront design:

The storefront must clearly identify the name and general nature of the store and give some hint as to the merchandise inside.

It includes all exterior signage and the architecture of the storefront itself.

Interior design:

The finishes applied to surfaces

The architectural shapes


Lighting design

Lighting greatly enhances store sales.

Contemporary lighting design requires an in-depth knowledge of electrical engineering and the effect of light on color and texture.

Sounds and smells: total sensory marketing

Effective store design appeals to the human senses of sight, hearing, smell, and touch.


Visual Communications

Name, logo, and retail identity

Must be catchy, memorable, and reflective of the retailer’s merchandising mission.


Institutional signage

Describes the merchandising mission, customer service policies, and other messages on behalf of the retail institution.


Directional, departmental, and category signage

Directional and departmental signage are usually large and placed fairly high, so they can be seen throughout the store.

Category signage is usually smaller and is intended to be seen from a shorter distance; they are located on or close to the fixture itself where the merchandise is displayed.


Point-of-sale signage (POS) - A relatively small signage placed very close to the merchandise, and intended to give details about specific items.

The most important function is to clearly state the price of the merchandise being signed.


Lifestyle graphics

Lifestyle images portray either the merchandise, often as it is being used, or simply images of related items or models that convey an image conducive to buying the product.

Lifestyle photography must be kept very general so as to be attractive to the majority and offensive to none.

DDI: Retal Store Design