Sales & MarketZing !

In continuation with our previous post about the AND approach to business of share and profitability . here is our take on this AND principle getting implemented in retail . retail dynamics ,is not about getting walkins alone but in doing walkins AND the more per customer act too! so the game is like in most business is to get more customers and more per customer ! here is the simple equation of retail business growth. sales = cash memo size (cms) (x) number of converted custom (converted customers =bills cut /number of customers ) cms (cash memo size)= sales/number of bills cut sales going up ,is dependent among other things ,on the "upt" factor ,upt is nothing but units per transaction .higher the upt ,normally means higher cash memo size too. This is how businesses can use this dynamics ... so if walkins are falling ,and the cms is growing ,along with upt growing ,with conversions holding then you should be ok . if sales needs to go up

we decided to predict the way consumers would shop in the future in the next 10- 15 years , here is our prediction of shopping in the future the future consumer( the current youth and toddlers ) would be completely set of pampered lot , they wud expect everything at their door steps mobile and pc ( e comm) led market place , than only street led ie a majority currently , there would be some big brands getting created in this( mobile and pc ) space soon . shopping would be less frequent ,but done in bulk from large format stores , by a bigger mix of consumers the consumer would be the king , queen and the shopper ! the far flung hinterlands of the country also would have a shopping destination coming up or already up , near by . loyalty programs would run galore for everything , retail outlets would recognise you as soon as you walk in thru rfid or smart cards and guide you to your favourite sections traditional shops wud survive but a majority wud turn out to be delivery store

Here goes the list of key retail maths that's done commonly to judge performance and trends i) Gross margin = Sales - Cost of good sold ii) GMROF = Gross Margin ( GM ) / the sqft area ( that delivered this GM) iii) Markup= the amount by which the cost price is taken up by , for example if the cost is 10 rs and the markup is 25 % then the selling price is 10 +2.5 =12.5 iv ) GMROI = the Gross margin ( GM ) / cost of inventory (that delivered this GM ) v) GMROL = Gross Margin ( GM ) / the amount of labor involved in delivering this GM vi) OTB ( open to buy ) is an indicator for the merchandiser whether he/she can buy more = Sales + markdown + opening Inventory -closing Inventory for the period vii) Margin = (Sales-cost)/sales viii) sell thru ( indicates off takes ) = Sales / ( sales + closing inventory ) ix) upt = Units sold /no of bills generated x) No of weeks stocks = Inventory / sales per week . of the unit that's being measured More later !

..here's something not many of us would have realised ,or may have realised ,anyways its interesting to note there are a lot of similarities between Telecom and Retail Business , wondering what is that , here is the connexion ... Traffic & Walkins :Telecom business depends upon something termed as Traffic ,which basically gives the usage of the consumers on your network , usually measured in terms of Minutes of usages ( Mou's ) , the same traffic is measured as Walk ins ,in retail ,which is nothing but the number of customers that have walked in your store in a particular measurement period .Both traffic and walkins are lifelines for the respective businesses. ARPU & CMS : In Telecom the average revenue that a sub on your network has generated in a month is termed as ARPU ( Average Revenue per user ) , gives a good picture of the the quality of your subscribers ,base obviously higher arpus are better , so how does it happen ..in Retail well this gets measured in te

Inflation must be one of the most discussed word in the recent times , suddenly its become a like a virus that's slowly but surely eating into our wallet ,with some of us realising it some not realising it ! Most premium retailers had just recovered from the great IPL cricket led footfall crunch , now comes in the Inflation virus ,these are really testing time for retail brands and retailers,there are reports of a 40 % drop in sales in some premium brand over the last year , as everything in retail starts with the footfalls and if that starts drying up ,the cost of retailing can Kill you soon . The Blog believes that retailers who have built their models with every day essentials ( the rice /vegetables /groceries ) , need not have sleepless nights as consumers would anyway need them in spite of the inflation or not ! as a retailer into essentials retailing said "consumers cant stop eating due to inflation ,so will continue to sell vegetables " ,the key is that consumers w

Retail Maths _ PART 1 Some basic factors that directly affects profits of a retail operations :: 1 Operating Income: Gross Sales = The total retail price charged on an item X No. of units actually sold Net sales = Gross sales – Customer returns & allowance Customer returns or allowance % = Rs. Cust. Returns allowance X 100 ---------------------------------- (Gross sales) 2.Total cost of merchandise : Cost of merchandise = Billed cost + Inward freight & transportation charge + Alteration & work room charges – Cash discount 3.Operating expenses: Operating expenses = Direct + Indirect expenses Cost of merchandise sold % = Cost of goods sold X 100 ---------------------- (Net sales ) Gross margin % = Gross margin X 100 -------------------- (Net sales) Net profit % = Net profit X 100 -------------------- (Net sales) More Later ! ( items in the denominator ( in brackets) have to move to the right sorry can't handle that ! )

New to Indian retail industry or contemplating an entry , then here is what you should know to get over the jargon shock !!:: here goes , the A B C of retail :: Catchment ::The area /zone of the city from which the customers come into for shopping from a particular store , catchment analysis pre launch would ideally decide the product mix and formats of the stores , catchment analysis done after a time gap of launch would also give a correct picture of whats happenng and where to concentrate ur Mktg energies to get more walk ins ! Cash memo size :: CMS = total sales for the month /no of bills generated in the month UPT :: Units per transaction , would give you a fair idea on to how customers are buying more of your products , per person or less per visit , UPT = No of bills generated in a month / total bills generated in the month , the higher trending of UPT with a distinct increase in cashmemo size is a healthy indicator of business .as UPt can be taken up by increase low value sale