Retailing Business and Retail Operations
Guide to Retail Store Management

The sole owner/manager should like people! People are customers, and they represent "stock in trade." As a representative of customers in the market, the retailer should purchase for resale those items of merchandise that customers will buy. They should make certain they associate with manufacturers, wholesalers, manufacturers' representatives, or their middlemen, who are responsible, and who will stand behind their merchandise. The retailer should buy from vendors who believe in the adage, "No sale final!" This means that the item purchased can be returned for credit if a customer is not completely satisfied.

Today's retail store business is vitally concerned with motivating customers, and attempting to learn why they purchase one product rather than another of equal price and quality. Customers today are better informed than ever before in our history. To do business with these customers requires the employment of well-educated and articulate individuals. The impact of poorly trained employees on the present and future image or reputation of the store can be very damaging.

Another important consideration in today's retailing business is the mobility of customers. Approximately 20 percent of customers move each year. This does not mean that the customers move out of the city; they may move to another part of the city, and, in the future, another retail store will receive their business. This is important to the retailer because he or she should always be adding new customers. If retailers fail to replace this 20 percent who move with new customers, they may soon find themselves without an adequate customer base, and this may cause them to fail.

Another aspect of mobility concerns new and attractive shopping plazas and malls. Customers often drive many miles to shop in them rather then doing business locally in an out-of-date, unprogressive retail store. This is an important consideration when store location or relocation is being planned.

It is necessary to acquire capital to carry the retailer through a minimum of two to three years of operation. Many large retail firms believe that it requires three to four years before a new store will return a profit. The cash-flow position should be of concern because without sufficient cash coming into the business it is not possible to take advantage of "good buys" from vendors or to pay invoices in the cash discount period. Expenses continue, and should be cut when daily sales decline, or when the business is closed because of floods, strikes, or other unforeseen emergencies.

One problem that creates difficulty for retaile store management is their reluctance to visit trade shows, or to visit the market occasionally in order to see what other retailers and manufacturers are doing. Retailers who do not attend trade shows are sincere in wanting to stay close to their business; however, they fail to realize their customers prefer to shop with those merchants who are progressive, not only in their merchandising offerings, but in their store layout, fixtures, and over-all environment. The small retailer should pay periodic visits to other successful merchants in larger cities, visit the market centers occasionally to see what other vendors are offering, and visit "key" manufacturers with whom they do business.

In summary, store retailers should make stores exciting places to do business. Remember - if retailers want a captive audience, they must captivate the customer!

To Retailing Business and Retail Store Management - Top