Ultimate guide to Retail !

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 sales , which would give the numbers !!( UPT and CMS should have positive correlation )

Like-for-like comparison( l to l ) : Comparing sales figures from the current period with sales figures from the same period in the previous year..This is a critical business health parameter check .

Units per sqft :: UPS = Total units sold in the month/Total area , basically gives yoy the sell thru rates on a sqft level , good comparison point while evaluvating performance between stores !

Rs /Sqft ::= Total business generated in a month /total sqft , basically indicates biz generated at per sqft level

conversion :: no of bills generated /number of customers walked in

Footfall: The number of people making their way to your store or shopping precinct.

BOGO: Buy one, get one free promotional offer and a way to be rude to customers without your boss having an excuse to sack you.

GWP: Gift with purchase. A type of promotion designed to encourage us to buy expensive perfume or makeup with the promise of a neat little goody bag containing free samples.

SOP :: Standard Operating procedures

VM :: Visual merchandising, the science behind" jo diktha hey woh biktha hey "!

Shrinkage: Sounds like its caused by a diet but often the result of shoplifting. This is the proportion of your stock which is lost through damage, theft or loss. lower the better , typically measured as a % of sales generated !

Gross margin GM = Sales - COGS

GMROF :=GM /Total sqft for the particular store or section

GMROI = GM/ total inventory for the particular store or section

GMROL = GM / number of people employed

NET MARGIN( Nm) = GM - Opex

NMROF/NMROI/NMROL are nothing but Net margin ( NM ) version of the above

hope the same has been useful , more later ..................ciao !