Retail matrix for beginner

Presentation Explain Retail Store Matrix for one to understand Basic formulas.

1. Matrix

2. Important Aspects of Store Operations
Customer Service On Shelf Availability
In Store Process
Staff Planning and
Motivation
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3. Manager’s Role in Strategy
Vision & Strategic Goals
Target Positioning People Management
In Store
Marketing
MerchandisingCustomer Relations
In Store
Efficiency
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4. Responsibility of Store Manager
Human
Resources
Efficiency
Store Business
Operations
Inventory
Management
Team
Development &
Motivation
Customer
Service
Sales
Generation
Safety &
Security of Store
Division of
Responsibility
Profit
Generation
Optimised Critical Important A Business Management Co.

5. Retail Mathematics
Understand Different Calculations in Day to Day Retail Operations
Average Transaction Value ( ATV)
Average Basket Size
Per Sq. Ft. Per Day Revenue
Footfall & Conversions
Margin / Gross Profit ( 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)
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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
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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
efficiently. Regular changes in display may be required.
Formula -
Per Sq.Ft. Per Day = Per Day Total Sales Revenue / Total
Sq.Ft. Area of Store.
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8. •This help us to know the average numbers off 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
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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 inflation, increase in
manpower, Advertisement costs and other external
factors.
For Example -
Attachment Ratio = Total Accessories / Total Sales
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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 firm'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 firm is unable to move inventory, it can take an inventory write-off for
some amount less than the stated value on a firm'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)
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11. Open to Buy (OTB)
•Ope to Buy (OTB) is the difference 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
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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
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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
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14. Margin/ Gross Profit (GP)
•It is a difference between the sales price and the cost price of a product.
•When a retail store offers discount or offers 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
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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
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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 inflation, 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
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17. Average Value of Inventory
•This can be figured 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
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18. Break-Even Analysis
•This is the point in your retail business where sales
equal expenses. There is no profit 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
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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.
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20. Sell-Through Rate
•This figure 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
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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
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22. Components of Profit & Loss ( P&L)
Revenue
EBITCost
P&L
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23. Basic of Profit & Loss ( P&L)
Net Margin Total Other Income Revenue
+
-
=
=
Total Revenue Total Expenses Store EBIT
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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.
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25. Retail Customer Experience
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26. Retail Customer Experience
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27. Conversation Model
Conversation
Model
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28. Retail Customer Experience
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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.
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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
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31. Every store has a different 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 floor, did not follow
it themselves.%"
Culture evolves and develops in a cycle. The reason this is significant 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 reflect 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
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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 flat 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
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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

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