managing and operating a recently acquired small retail business. The paper specifically focuses on strategies for targeting customers and information gathering, a plan for recruiting and training new staff and employee management, the relevance of the concept of one hundred percent location and saturation to the business, as well as important financial dimensions for the business. Also, the paper provides a name, mission, and philosophy for the business, a description of hours of operation, and a plan for cultivating an inviting store atmosphere.
Strategies for Targeting Customers and Information Gathering
The importance of targeting customers and gathering information about the target market cannot be overemphasised. It is crucial for understanding customer behaviour, how to best serve the target market, whether a market exists for offering(s) in question, as well as how to effectively communicate with the target audience (Mathur, 2010). In the retail industry, targeting customers may be a little bit different compared to other industries, owing to the somewhat unique nature of the industry (Bhatia, 2008). One strategy that can be relied upon as far as targeting customers is concerned is to start with the prevailing customer base (Mathur, 2010). The store has been in operation for a while, over which crucial information about customers has been gathered. This information can be crucial for understanding the target customer, especially in terms of demographic characteristics (such as age, gender, family size, education, and income level), number of repeat customers, average shopping expenditure per customer, as well as the most and least bought merchandise. This approach would be helpful for not only maintaining the existing clientele, but also acquiring new customers.
Another strategy that can be helpful is to use the existing customer database to conduct a customer survey (Fernie, Fernie & Moore, 2003). Email addresses can be extracted from the database, and an online survey administered to customers. In addition to demographic data, the survey can gather crucial information about aspects that customers like or dislike about the store. These aspects may relate to store appearance, fastness of the check-out process, staff friendliness, easiness of locating items in the store, and so forth. This information can in turn be used to enhance service delivery, and thereby enhance customer satisfaction. Without satisfaction, customers can readily switch to other alternatives. Collecting customer information, therefore, will provide an important opportunity for the store to improve its competitive advantage. With a comprehensive understanding of the target market and their needs, the store would be better placed to decide which consumer segments and merchandises to focus on.
Recruiting and Training New Staff
The store will require an additional workforce. Two new part-time and two new full-time employees will be needed to support the operations of the store. Recruiting can often be a costly and time-consuming undertaking for businesses. Owing to the small size of the business, it will be important to consider resource constraints when making recruitment decisions (Mathur, 2010). Conventional techniques such as print advertising and recruitment may be quite out of reach for the business at the moment. Consideration will, therefore, be made to modern approaches such as social media and online recruiting. Social networks such as Facebook and Linkedin as well as online recruitment tools offer platforms through which small businesses can inexpensively meet their human resource needs. The store can also rely on the owner’s own networks. Friends and acquaintances can often provide helpful referrals. On the whole, the recruitment initiative should be driven by the desire to locate individuals with the skills, knowledge, and attributes for a position in the retail environment.
It would be imperative for the new employees to be properly trained if the store is to effectively deliver on its promises to its target audience. New employees must have adequate knowledge of customer service aspects such as answering the phone, greeting customers, and selling merchandise. This knowledge is often acquired via on-the-job training. In an effort to avoid the costs associated with training new employees, retailers tend to hire employees from competitors (Bhatia, 2008). While the need to avoid training costs may be a valid justification, it is crucial to teach new employees one’s own way of doing things. All new employees, whether experienced or not, will be taken through training. This will primarily take the form of brief training sessions conducted at the store’s premises by the store owner. This approach will ensure minimal training costs. Nonetheless, this does not necessarily imply inadequate training.
One Hundred Percent Location and Saturation
The concept of one hundred percent location and saturation will be relevant for the store. The concept essentially denotes the establishment of a retail store in a location with the most sales potential compared to any other location in the local market area (Fernie, Fernie & Moore, 2003). Retail businesses generally rely on huge flows of customer traffic. Indeed, location is an important determinant of success for any retail business. Retail businesses situated in locations with a high traffic count are more likely to generate more revenue compared to those situated in low traffic locations. A location with a sizeable population of the target audience will be the most appropriate location for the store.
A good location for a store is not just about traffic. The location must be convenient and readily accessible (Mathur, 2010). This means that consideration must be made to how easily consumers can access the store, whether by walking, cycling, driving, or public transportation. Other important factors to consider include competition, availability of parking, traffic congestion, property costs, zoning restrictions, crime rates, as well as proximity to commercial and social facilities. A location with such attributes is likely to offer maximum sales. Such a location is referred to as a one hundred percent location.
Important Financial Dimensions
Effective management of a retail business calls for sound financial decisions. Sound financial management determines the extent to which the retailer is profitable. Four financial dimensions that will be crucial in this case include sales, inventory turnover, gross margin, and expenses. It will be important to monitor the movement of sales as well as compare sales between different time periods and across different products and customer segments (Bhatia, 2008). Sales can be improved by deploying techniques such as sales promotions, discounts, and loyalty programs. The dimension of inventory turnover is used to measure the speed with which inventory moves (Mathur, 2010). This measure is an important driver of revenue performance. It enables a retailer to determine fast and slow moving merchandise, and thereby ensure optimal inventory costs. A low inventory turnover may be a pointer to overstocking, obsolescence, product deficiencies, and poor marketing. The store can ensure a desirable inventory turnover by using strategies such as price adjustment, inventory control, increasing marketing activity, and minimising the purchase of slow-moving merchandise.
Gross margin — the difference between sales and cost of sales — also constitutes an important financial dimension for a retailer (Fernie, Fernie & Moore, 2003). Indeed, gross margin can be described as the lifeline of any retail business. A high margin may cause customers to perceive the retailer as overpriced, while a low margin may lead to cash flow problems for the retailer. The retailer must, therefore, determine the most appropriate level of gross margin. This can be achieved by either increasing prices or lowering costs. Reducing the cost of sales may also be used, though it may not be an easy option. Another important financial dimension relates to expenses. This item, which includes items such as salaries, utilities, insurance, and administration, is a significant determinant of profitability (Mathur, 2010). A retailer should ensure an optimal proportion of expenses to sales to achieve a desirable level of profitability. The store can minimise expenses via strategies such as eliminating unnecessary activities and processes, incorporating technology, and ensuring an optimal number of employees.
Name, Mission, and Philosophy
An appropriate name, mission statement, and philosophy will be crucial to the success of the business. The name of the business will be M&M. The mission of M&M is to provide the preferred shopping destination for household supplies, groceries, clothing, as well as fashion accessories. The store will be committed to delivering exceptional customer service at affordable prices. This will be crucial for building and maintaining robust relationships with customers. The store will be driven by customer-centeredness, diversity, community support and engagement, as well as employee-focus. This philosophy will be an important source of competitive advantage for the business.
Hours of Operations and Employee Management
The store will operate seven days a week. From Monday to Saturday, the store will be open from 8 am to 8 pm. For Sundays and public holidays, the store will operate from 10 am to 8 pm. Operating seven days a week will be important for maximising the store’s revenue. In addition, it will enable customers to shop during any day of the week, thereby attracting a larger customer base.
Being in operation 10-12 hours a day for seven days a week means a somewhat stretched work schedule for employees. Accordingly, it will be important to carefully balance the needs of the business and those of employees. This will be achieved by providing attractive compensation, offering good working conditions (such as comfortable furniture), and granting every member of staff one day off every week. This is expected to yield outcomes such as employee satisfaction and employee retention. Indeed, employee satisfaction and employee retention will be the two most important goals of employee management.
Creating an Inviting Store Atmosphere
An appealing store atmosphere can be a significant driver of success for a retail business. It is vital for keeping customers coming back and even creating a pleasant working atmosphere for employees (Fernie, Fernie & Moore, 2003). To create an ideal store atmosphere, it is important to first consider the characteristics of the target market. Would customers love a sleek store, or a more traditional one? Would they love background music? This information helps the retailer to determine the personality, image, and style of the store. It also helps the retailer to determine the most appropriate fixtures, especially with respect to furniture as well as in-store decor. Furniture, lighting, furnishing, ornamentation, and choice of colour can significantly appeal to the emotions of customers.
An inviting store atmosphere is not just about music and fixtures. Price tags, shelf labels, shelf arrangement, and the physical appearance of employees can also make a difference (Mathur, 2010). For instance, providing unique and stylish price labels and shelf labels can make items more visible to the customer, which may contribute to customer satisfaction in one way or another. The manner in which items are arranged on the shelves can as well enhance visibility and make the shopping experience more exciting. Equally, having employees don clothes that resonate with the image and personality of the store can make the store atmosphere more appealing. Other aspects that may contribute to an inviting store atmosphere include staff friendliness, fast service delivery, as well as scent and cleanliness (Bhatia, 2008).
Conclusion
Overall, proper management of the store will be important if it is to thrive in the highly competitive retail environment. Attention should particularly be paid to comprehensive customer profiling, effective employee development and management, appropriate choice of location, sound financial management, as well as an inviting store atmosphere.
References
Bhatia, S. (2008). Retail management. New Delhi: Atlantic Publishers.
Fernie, S., Fernie, J., & Moore, C. (2003). Principles of retailing. New York: Routledge.
Mathur, U. (2010). Retail management: text and cases. New Delhi: International Publishing House.
