Retail research

Retail research:

n  Retailers need to know who is buying what, where and when.

n  Analysing till receipts is useful, but can only give retailer information on what has happened and not what is going to happen.

Classifications and Methodology of Retail Research :

Retail Research Components

·        Store location

·        The consumer

·        Merchandising

·        Advertising and Promotion

·        Customer services

·        Human Resources

·        Sales methods

·        Competition

Store Location

·        Trade area size

·        Trade area demographics

·        Degree of competitive saturation

·        Appropriate retail environment

·        Sufficient parking available

·        Public transportation

·        Shopping center competition

·        Competition’s interest insite

The Consumer

·        Will merchandise selection meet customer’s needs?

·        Does the consumer have adequate finances?

·        Will store hours be conducive to consumer’s needs?

·        Do the market psychographics fit with the retailer’s philosophy?

·        Are consumers shopping habits in line with retailer’s policies?

·        Does the customer match the store’s image?

·        Will the targeted market purchase from the Web site?

·        Is the catalog’s format appropriate?

Merchandising

·        Is the brand assortment right?

·        Will private label merchandise compete effectively with merchandise at discount establishments?

·        Is the price right?

·        When should new merchandise be introduced?

·        What is the target turnover rate?

·        How should markdowns be handled?

·        Are automatic markdowns appropriate for the company?

·        Would frequent markdowns benefit the turnover rate?

·        How many merchandise resources should be used?

Advertising and Promotion

·        Which media should be used to advertise?

·        What proportion of the budget should be for newspaper advertising?

·        What should be the goals of the advertising budget?

·        How often should catalogs be sent?

·        What format is to be used for Web site promotions?

·        What special events should be used?

·        How should visual merchandising be handled?

·        Is a traditional format or an “environmental” format better for the retail store?

Customer Services

·        Would personal shoppers increase sales?

·        Should there be a charge for gift wrapping?

·        Will shipping charges apply to Internet purchases?

·        Would a child-care center increase sales?

·        Will sales associates with foreign language skills increase sales?

·        What food facilities are appropriate?

·        Should there be a charge for alterations?

·        Should expanded shopping hours be introduced?

Human Resources

·        Which personnel sources provide the best employees?

·        What motivational techniques will reduce turnover?

·        What training methods should be used?

·        What is the role of HR in new employee selection?

·        What benefits and services should be available?

Sales Methods

·        Should there be self service or personal selling?

·        Should employees be assigned specific areas or placed in busiest areas?

·        Should computer stations be used in place of sales associates?

Competition

·        Should there be a system to assess the competition’s inventory?

·        Should the quantity of competition be assessed before location decisions are made?

The Research Process

·        Identification of Problem

·        Defining the Problem

·        Gathering Data

·        Selecting a Sample

·        Collecting and Tabulating Data

·        Data Analysis and Report Preparation

·        Making the Decision

Methods of Gathering Data

Secondary Data                                                        

Company records                                                                       

Governmental agencies                                                                       

Trade associations

Private research organizations

Periodicals

 Primary Data

         mail Questionnaires

Telephone questionnaires

On-line questionnaires

 Intercept surveys

Observations

Focus groups

Questionnaire Considerations

·        Length of questionnaire

·        Easily understood language

·        Sequential question arrangement

·        Specific questions

·        Multiple choice answer format preference

Trends in Retail Research

·        Increased use of focus groups

·        Outside agency use

·        Organizational studies

·        Human resources retention

·        Location analysis

Modern retailing (organized retailing) vs. traditional retailing:

Modern retailing (organized retailing) vs. traditional retailing:

Why do Organized Retail or Modern Retail require a different distribution network as compared to the Traditional Retail? Why cannot the same distributor who services the regular stores (mom and pop stores) service the Modern Retail or Organized Retail?
To understand this, let us look at the differences in the logistics of a Traditional Retail channel and Modern Retail or Organized Trade channel.

1. Order Acquisition

Traditional Retail: The sales person goes to the outlet, counts the inventory, explains the promotions (if any) and then suggests an order to the store owner. The store owner then agrees or modifies the order.

Modern Retail: The order would be suggested by the IT system of the Modern Retail chain. This order either would flow to the manufacturer/ LSP (Logistics Service Provider) via EDI or email or fax.

2. Order Execution

Traditional Retail: The distributor would deliver the order 1-2 days after the order was taken. Or if the model of operation is a ready stock unit [ the salesperson who takes orders travels with a van which carries the stocks] , then the stocks are delivered as soon as the order is taken – the salesperson hands over the order to be delivered to the merchandiser/ delivery boy who travels with the van. They pick the stocks from the van/ vehicle and deliver to the store/warehouse.

Modern Retail: The delivery slots or delivery windows are fixed by manufacturer. The deliveries to the DC (Distribution Centre) or Stores have to be made within the delivery slots or delivery windows. Any miss on the delivery windows or delivery slots would lead to a penalty or/and going back to the last in the queue (your delivery will be scheduled after all deliveries for the day have been completed) or/and delivering directly to the stores.

Some Modern Retailers may require deliveries in pallets .If the Modern Retail / Organized Channel does cross-docking, then packing would have to be done store wise [ 1 pallet per store].

In many cases since deliveries to stores has to be done in van/ trucks the deliveries may have to be done at night when there is no NO-ENTRY restriction on heavy vehicles.
In some cases deliveries are scheduled as per the category – food on a particular day, personal care (soaps, shampoos, toothpaste) on another day, staples on another day etc. If a company operates across categories, the company would have to do multiple deliveries in a week.

3.Promotions

Traditional Retail: Standard company promotions are executed.

Modern Retail: Promotions would be partially led by the Modern Retailers. These promotions would be unique to the Modern Retailer. Any stickering or customization or manipulation that needs to be done will have to be done by the manufacturer or LSP.

4.New Launch

Traditional Retail: A manufacturer would have a sales launch for Traditional Retailers to introduce a new product to the market. On the day the product is to be launched, the salesperson would take orders for the new product and the new product would be on the shelves.

Modern Retail: The launch of a new product in Modern Retail is more complicated. The new product launch would have to be informed to the Modern Retail months in advance. It would have to be included in the product master of the Modern Retail. The planogram would have to be modified to include the new product. In some cases, a placement fees would also have to be paid.

5.In-Store

Traditional Retail: Once the stocks are delivered, the store owner or shop assistant arranges the stocks on the shelf or in the back room. When a customer asks for a product, the shop assistant knows where the stock is kept, gives the product to the customer.

Modern Retail: The stocks may be taken straight to the shelf or taken to the backroom. One of the most important differences between a Traditional Store and Modern Retail store is that in a Modern Retail store the customer picks up the product from the shelf. If the product is not on the shelf, the customer assumes that it is out-of-stock. The product may actually be available in the backroom. So, one of the important logistics activity in a Modern Retail store is to replenish the shelves regularly so that the shelf is always stocked. Many stores maintain merchandisers whose job is to replenish the shelves from the backroom.

6.Payment

Traditional Retail: Payment is made to the stockist or distributor immediately or on the next visit of the salesperson. So, the credit period is usually equal to the time between 2 visits of the salesperson.

Modern Retail: Modern Retailers usually demand a long credit period from manufacturers and vendors. Sometimes, a Modern Retailer may ask for a special format for their invoices. They would not accept the standard invoice format of the manufacturer.

7.Metrics/ Scorecard Measures

Traditional Retail: Usually, Traditional channel stores do not have a formal scorecard to measure manufacturers. They have a general approach which would be regularity of coverage, time between order and delivery, and fill rates.

Modern Channel: Modern retail chains have a formal scorecard to measure manufacturers. The logistics measures would be shelf availability, inventory levels, case fill rates, on-time delivery.
Because the logistics process of Traditional Retail channel is different from the Modern Retail/ Organized Retail channel, manufacturers have a different team for the two channels. This is what the big players do. The smaller players outsource the logistics of the Modern Retail/ Organized Retail to LSPs.