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