MANAGING INVENTORY TURNOVER

Managing Inventory Turnover

Inventory turnover helps assess the buyer’s performance in managing this asset. Retailers want to achieve a high inventory turnover (stock-turn), but just focusing on increasing inventory turnover can actually decrease gross margin and gross margin return on investment (GMROI).

Buyers therefore need to consider the trade-offs associated with managing inventory turnover.

Potential Problems with Approaches for Improving Inventory Turnover

Retailers need to strike a balance in their rate of inventory turnover.

Some approaches for improving inventory turnover can have the opposite effect resulting in lower GMROI by lowering sales volume, increasing the cost of goods sold, and increasing operating expenses.

One approach to increase turnover is to reduce the number of merchandise categories, the number of stock keeping units (SKUs) within a category, or the number of items within an SKU. However, if customers can’t find the size or color they seek-or even worse, if they can’t find the brand or product line at all due to the reduces assortment, patronage and sales can decrease. Retailers have to be careful as customers who are disappointed will most probably take their business elsewhere and possibly urge their friends and family to do the same.

Another approach for increasing inventory turnover is to buy merchandise in smaller quantities and more often, which reduces ones average inventory without reducing sales. But buying in smaller quantities could impact negatively on the gross margin and buyers may not be able to take advantage of quantity discounts and supply chain economies of scale. This process could also increase operating expenses, in that more time and administration is required to manage this process.

For more information on Merchandise Management and much more, consider studying Master Retailing’s Bachelor of Commerce in Retail Management.

Enrolment throughout the year. For further information email: info@mretailing.co.za or phone our head office (012) 654 4688

www.mretailing.co.za

GROUND BREAKING EDUCATION-RETAIL COLLABORATION

GROUND BREAKING EDUCATION-RETAIL COLLABORATION

A significant development milestone has been celebrated with the announcement of a collaboration between retail education provider Master Retailing and Food World, a renowned chain retail store in Zimbabwe. Demonstrating exemplary leadership, General Manager of Food World, Denford Mutashu and five members of his Management team have enrolled for specialist courses in Retail Management offered by Master Retailing, a distance learning organization headquartered in South Africa.

Master Retailing, established primarily to address the huge skills shortage in the Wholesale and Retail sector, provides internationally accredited courses in all aspects of Retail Management. At the presentation of the study packs, Business Partner of Master Retailing, Morgan Govender remarked, “It is a real spur that the top leadership is setting such a fine example to refine their skills in Retail to the benefit of the business and customers alike. In the same vein, it is heartening to see other retail giants also entering the fold to prioritise education.”

 Apart from Business Leaders, all employees, who aspire to improve their position in the retail environment, qualify to study with Master Retailing regardless of their school leaving levels.  General Manager of Food World, Denford Mutashu, believes that leaders must walk the talk, “Growth and development have a domino effect; having relevantly skilled staff improves their human value, resulting in improved customer loyalty and ultimately a happier community.”

The study pathway begins from three, six, and twelve month certificate courses. These courses are designed to take the practical aspects of Retail work into account, so the study format is open book assignments and no exams. The coursework activities require students to draw on the work environment. The degree courses, these being the B.Comm and MBA in Retail Management include assignments, examinations and dissertation. Master Retailing has initiated collaboration opportunities with educational institutions, giving the greater public access to study Retail Management courses. Interested persons may visit their website on www.mretailing.co.za 

Customer Service

THE CUSTOMER IS THE MOST IMPORTANT PERSON IN YOUR BUSINESS. THE QUESTION IS, SO WHEN ARE YOU GOING TO START TREATING THEM THAT WAY? IT IS VERY SIMPLE NO CUSTOMER = NO BUSINESS = NO JOB

Ask yourself the question: “Why will a customer come to my store and not go to my competitor?”

It is a known fact that products and even prices can easily be replicated; the only real differentiation that will set you apart from your opposition is providing superior customer service.

We at Master Retailing believe in the BEDU principle regarding customer service

B – Basic

E – Expected

D – Desired

U - Unexpected

Today we will be looking at just a couple of of Basic Customer Service Guidelines

Topic: HOW TO DEAL WITH CUSTOMERS ENTERING MY STORE

When a customer enters your store, literary drop everything you are doing and immediately attend to the customer, this will make the customer feel important and valued:

                                         1. If you are busy with your boss:

·        Excuse yourself from your boss and immediately go and attend to the client, your boss will understand that the customer always comes first, if not, then customer service is definitely not a priority in your business and chances are this could be a contributing reason why your store may not be performing to its full potential.

2. If you are busy with another client:

·        The client you are busy with will not be offended if you politely mention you would just quickly like to inform the other client that you will attend to them shortly.

·        Then very quickly go to the client who has just entered the store and greet them with a friendly welcome and smile and inform them that you are just busy with another customer and you will come and assist them asap. With a friendly smile suggest they browse around so long and reiterate that you will be with them as soon as you have finished helping the other client.  

·        Quickly make your way back to the client you were busy with, apologise for the interruption and then continue with assisting the client. I can assure you both clients will respect your level of customer service and professionalism.

3.    If you are busy on the company phone:

·        The client entering the store does not know if you are busy with work, another client or even a personal call, either way they don’t really care.

·        Immediately explain to the caller you have a customer who requires your attention, if it is another customer then ask if you can call them back or would they momentarily hold just so that you can go inform the client that you are busy with another customer on the phone and that you will be with them directly thereafter.

·        Quickly return to the phone, apologise for the disruption and continue assisting the person on the phone.On completion of the call immediately go and assist the client and appologise to them for having been on the phone.

·        If it is a co-worker, your boss or even Head Office on the phone, you need to respectfully request to end the call so that you can go attend to the customer. Once you have finished with the customer and they have left your store, immediately return the call that you were busy with prior to the customer entering your store.

·        Worst case scenario if your boss or Head Office don’t value customer service excellence as much as you do, and you are not able to end the call, at least then make eye contact with the customer and acknowledged their presence and even by using hand gestures, indicate you will be with them shortly.

For more on the art of customer service, don’t hesitate to contact us for accredited workshops, learnerships and/or distance learning at the most competitive prices in South Africa.

Don’t forget, the customer pays your salary and superior customer service will give you the competitive advantage above your opposition

The Master Retailing Team

How to sell

Selling is all about three things:  Good Relationships, Solution Crafting and Trust.

 Fall down on just one of these and your career as a sales person will indeed be a very difficult one. But follow the right “recipe” and sales will become the most enjoyable thing that you have ever done.
The following 7 steps will help you towards success in sales.

1. Manage your sales pipeline so that it works for you and creates sales:  This is a no-brainer and yet the place where most salespeople fall down.  It’s a revenue generator if done right.
2. Build lasting business relationships quickly:  Often a sales person is good at quickly forging relationships.  That is probably a big reason why you like selling. You like people and people like you. But building a lasting relationship that pays off in your business is a skill that is learned.
3. Focus on your client need and not on your product:  You have to help the client discover his need. Often they don’t know what it is! Turn want’s, like’s and dreams into needs.
4. Close the deal: Employers don’t pay you a salary for the knowledge that you have. They pay for the deals that you close. “Tell me what results you have achieved or you are only as good as last month’s figures.
5. Become your client’s “go-to” person:  Don’t be a one-time-wonder.  You may have made your client very happy at the original sale, but that happiness will soon turn to resentment and disappointment if not nurtured.
6. Create sales strategies that provide solutions:  Customers love problem solvers! Wherever there is a problem and you can provide a solution, you can make money.
7. Ring-fence your client so that competitors cannot get in!  If you are not fulfilling the client’s needs, someone else will be too happy to. It is more difficult to get a new customer than it is to keep an existing one.

Top sales people are those that put in the work, i.e. what you put in is what you get out regardless of circumstances.
Obstacles that sales people complain about in their career are more often than not placed there by themselves…

One of the key areas of sales is to overcome obstacles, to learn more about sales and customer service contact us at info@mretailing.co.za

The Master Retailing Team

The Role of a Store Manage

The Store Manager holds one of two critical positions in any retail organization. The other one is the CEO.

  

Sales Associates are your ambassadors in the business; meeting the customers face to face every day. And, as you’ve probably come to realize, all Sales Associates need to be competent and fully trained to sell to customers and to represent the company in the best possible way.  

  

But, there is one person who must ensure that all of the training is put to good use on the sales floor. That person is the Store Manager, without whom there would surely be chaos. It is up to the Store Manager to set individual targets and to continually reinforce the performance culture in the store.

                                         

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“A pack of sheep led by a lion will defeat a pack of lions led by a sheep.” Author Unknown

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A true statement? We at least think so.

  

The Store Manager is, by virtue of his/her position if nothing else, the leader of the pack. That leader is single handedly responsible for the performance of the team. No matter how skilled the team members are – and it is understood that some will be much more skilled than others - the Store Manager will make the difference in the performance levels achieved by the whole team. At Master Retailing we have a saying that goes, there is no such thing as a bad performing store, only a bad performing manager. Have the right manager and the store will perform to the best of its potential.

Store Manager’s official job descriptions vary widely. Some are expected to be administrators; others loss prevention officers, or police. Some are expected to be the top sales person and are seen as underperforming if any of their sales associates achieve higher sales value than themselves. Still others are instructed to do so many tasks that there is little focus on what is really important.  

  

What are you asking of your Store Managers?

  

If you expect your retail organization to be successful, you are asking them, simply, to manage the business. So, what does that mean, exactly?

  

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"Hire the best person for the job and then get out of their way while they do it." Author Unknown

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If you are going to hold your store managers accountable, at least let them make the decisions for which they are being held accountable. Sometimes this is easier said than done I know especially if you don’t have an experienced retailer at the helm. If not and the individual shows potential, get them correctly trained and skilled, and you will be surprised at the improved performance.

The Store Manager’s main role is to drive the business; to strive for top performance from themselves and from every employee and sales associate every minute of every day. Store Managers operate stores, or business units, and, when all is said and done, the goal is to provide a “profitable business” with a good return to their stakeholders.  

  

In support of that goal, they need to do a lot of work; they need to do all of the right things right.  

  

They recruit and hire good people because they know that the road to success is much easier when they are surrounded by competent people. Nobody can soar like an eagle when you are surrounded by a bunch of turkeys, as a store manager, there success is your success. Store managers ensure each associate is well trained to carry out their responsibilities. They set daily, weekly and monthly targets for each associate and continually follow up to make sure those targets are being met. They coach, and they guide, and they stay on top of everything having a constant finger on the pulse.

  

Very importantly, they take appropriate action when targets are not being met. They figure out what is causing the problems and fix them.

  

Of course, there are many things the Store Manager is responsible and accountable for. But all of those things must be in support of the goal, or the main purpose for the store’s existence.

  

Great Store Managers are your ticket to extraordinary success in retail.

  

All the Success!

Master Retailing