Introduction to Retail Management | Free Course with Certificate

Summary

Este curso introductorio de gestión minorista, impartido por Rasha Muhammad, fundador y presidente de Retail Dogma, ofrece una visión general del sector minorista. Rasha comparte su experiencia de más de 14 años en el comercio electrónico en tres países y guía a los estudiantes a través de los fundamentos de la gestión minorista. Define lo que es la venta al por menor, los principales modelos de negocio, funciones y claves para el éxito. Explora KPIs claves como la margen bruta, la rotación de inventario y la experiencia del cliente. Además, Rasha discute cómo los negocios minoristas pueden innovar en su modelo de negocio y cómo las funciones principales y de apoyo trabajan juntas para entregar valor al cliente. Finalmente, Rasha ofrece consejos para quienes buscan comenzar una carrera en la gestión minorista, destacando los roles operativos y comerciales, y cómo desarrollar habilidades de liderazgo y entendimiento de negocios para progresar en su carrera.

Takeaways

• 🏢 **Identidad del Instructor**: Rasha Muhammad, fundador y presidente de Retail Dogma, con más de 14 años de experiencia en la industria minorista en tres países.
• 📈 **Concepto de Retail**: El retail es el último paso en la distribución de mercancías, donde los productos llegan al consumidor final a través de diferentes canales.
• 🛍️ **Tipos de Retailers**: Existen dos tipos principales: minoristas de tienda (físicos) y minoristas sin tienda (como el comercio electrónico).
• 🌐 **Ejemplo de DTC**: RX Bars, como marca DTC (Direct to Consumer), vende directamente al consumidor a través de su sitio web y también a través de minoristas de tienda física.
• 📊 **Categorías de Retail**: Las tiendas se clasifican según los productos que ofrecen, como ropa, muebles, alimentos, entre otros, siguiendo el sistema de clasificación de la industria de EE. UU.
• 💰 **Modelo de Negocio**: El modelo básico de retail consiste en comprar en grandes cantidades y vender en pequeñas al público a un precio más alto, lo que genera beneficio bruto.
• 📈 **Innovación en el Modelo de Negocio**: Los minoristas pueden innovar al ajustar su modelo de negocio, agregando componentes de suscripción o consignación para aumentar los flujos de ingresos.
• 👥 **Funciones de la Empresa**: Las funciones principales incluyen la adquisición, la mercadería, las operaciones de almacén y las operaciones de retail, apoyadas por funciones de marketing, recursos humanos, finanzas e IT.
• 📊 **Éxito en Retail**: Los tres claves para el éxito son el número adecuado, la experiencia del cliente y la identificación de una necesidad no satisfecha en el mercado.
• 📉 **KPIs para Retail**: Los indicadores clave de rendimiento incluyen las ventas en tiendas similares, el margen bruto, el margen de beneficio antes de impuestos y los estados financieros.
• 👩‍💼 **Carreras en Retail Management**: Las carreras en retail management comienzan en roles operativos y comerciales, donde el liderazgo y el conocimiento de negocios son fundamentales para el progreso.

Q & A

¿Quién es Rasha Muhammad y qué papel desempeña en el curso introductorio sobre gestión minorista?

Rasha Muhammad es la fundadora y presidenta de Retail Dogma. Con más de 14 años de experiencia en la industria de la venta al por menor en tres países diferentes, Rasha ha trabajado en roles operativos en marcas de moda y belleza, y más tarde gestionó una marca de moda de manera integral como parte de un conglomerado de minoristas en el Medio Oriente.

¿Cuáles son las dos principales formas de venta en minoristas?

Las dos principales formas de venta en minoristas son los minoristas de tienda, que son las tiendas físicas tradicionales, y los minoristas sin tienda, que incluyen negocios de comercio electrónico, casas de pedidos por correo, operadores de máquinas expendedoras y establecimientos de venta directa.

¿Cómo se define el modelo de negocio principal de la venta al por menor?

El modelo de negocio principal de la venta al por menor consiste en comprar mercancías en grandes cantidades a precios bajos y venderlas en pequeñas cantidades al público general a precios más altos. La diferencia en el precio se conoce como beneficio bruto, que se utiliza para financiar y pagar los gastos de las operaciones y actividades clave del negocio.

¿Qué es el 'Canvas de Modelo de Negocio' y cómo se utiliza en el curso?

El 'Canvas de Modelo de Negocio' es una herramienta utilizada para diseñar, comprender, construir, retocar o comunicar cualquier modelo de negocio. En el curso, se utiliza para analizar y explicar en detalle el modelo de negocio de una empresa hipotética llamada 'Organics', que es un minorista de alimentos orgánicos.

¿Cómo se definen las funciones principales y de apoyo dentro de un negocio de venta al por menor?

Las funciones principales en la venta al por menor incluyen la adquisición, la mercadeo, las operaciones de almacén y las operaciones de venta al por menor. Las funciones de apoyo son aquellas que apoyan el negocio principal y construyen la infraestructura de la empresa, incluyendo marketing, recursos humanos, finanzas e información tecnológica.

¿Cuáles son las tres claves principales para el éxito de un negocio de venta al por menor?

Las tres claves principales para el éxito de un negocio de venta al por menor son: tener los números correctos, ofrecer una experiencia de cliente excepcional y crear una propuesta de valor que satisfaga una necesidad no cubierta por otros negocios en el mercado.

¿Qué son los KPIs y cómo se utilizan para evaluar el rendimiento de un negocio de venta al por menor?

Los KPIs, o indicadores clave de rendimiento, son medidas que se utilizan para evaluar el desempeño de un negocio. En la venta al por menor, KPIs como las ventas en tiendas similares (comps o lfl growth), el margen bruto, el margen de beneficio antes de impuestos y los estados financieros (hoja de ingresos, balance general y estado de flujo de efectivo) son utilizados para guiar y medir el rendimiento del negocio.

¿Cómo se define la trayectoria de carrera en la gestión minorista?

La trayectoria de carrera en la gestión minorista comienza generalmente con roles operativos en tiendas, como asistente de tienda o gerente de tienda, y luego puede avanzar a roles de gerente de área o director de operaciones. Además, existen roles comerciales en adquisición y mercadeo, así como roles en mercadeo visual que también pueden llevar a posiciones de liderazgo y responsabilidad a nivel corporativo.

¿Por qué es importante la experiencia de cliente en el éxito de un negocio de venta al por menor?

La experiencia de cliente es crucial para el éxito de un negocio de venta al por menor porque permite adquirir más clientes y mantener a los existentes, lo que a su vez ayuda a proteger el negocio de la competencia y a nuevos entrantes en el mercado. Una experiencia de cliente negativa puede hacer que los clientes elijan a la competencia en el futuro.

¿Cómo se pueden ajustar los modelos de negocio de venta al por menor para innovar y aumentar los flujos de ingresos?

Los modelos de negocio de venta al por menor se pueden ajustar de varias maneras para innovar y aumentar los flujos de ingresos. Algunas estrategias incluyen agregar componentes de suscripción para entregas semanales, o implementar un modelo de consignación que permita a otros vendedores exponer y vender sus mercancías en la tienda en exchange de una comisión por cada venta.

¿Qué tipo de habilidades son necesarias para avanzar en una carrera en la gestión minorista?

Para avanzar en una carrera en la gestión minorista, se requieren habilidades de liderazgo para gestionar equipos más grandes y múltiples equipos en diferentes tiendas. Además, a medida que se asciende a niveles más altos, se necesitan habilidades de agudeza empresarial para comprender y manejar aspectos financieros y de negocio, así como habilidades creativas y artísticas para roles en mercadeo visual.

¿Cómo se puede seguir el curso introductorio de gestión minorista más allá del video?

Para seguir el curso introductorio de gestión minorista más allá del video, los estudiantes pueden completar el curso en el sitio web de Retail Dogma, tomar el examen final y, si lo desean, descargar el certificado de finalización del curso.

Outlines

00:00

😀 Introducción al manejo de tiendas

Rasha Muhammad, fundadora y presidenta de Retail Dogma, da la bienvenida a este curso introductorio sobre manejo de tiendas. Con más de 14 años de experiencia en la industria de la venta al por menor en tres países, Rasha cubre los conceptos básicos del manejo de tiendas, incluyendo la definición de lo que es la venta al por menor, los principales modelos de negocio, funciones y claves para el éxito en este tipo de negocio. Además, se discuten los KPIs clave y las carreras en el manejo de tiendas.

05:01

💰 Modelo de negocio de la venta al por menor

Se explica el modelo de negocio básico de la venta al por menor, que consiste en comprar mercancía a granel a precios bajos y venderla en pequeñas cantidades al público general a precios más altos. La diferencia se conoce como beneficio bruto. Se utiliza la plantilla del tablero de negocio de nueve bloques para explorar en detalle este modelo de negocio, utilizando un ejemplo hipotético de una tienda de alimentos orgánicos llamada Organics. Además, se discuten las posibles modificaciones en el modelo de negocio para innovar y aumentar los ingresos.

10:02

📈 Funciones principales y apoyo en la empresa de venta al por menor

Se describen las funciones principales y de apoyo dentro de una empresa de venta al por menor. Las funciones principales incluyen la adquisición, la mercadería, las operaciones de almacén y las operaciones de venta al por menor. Las funciones de apoyo incluyen marketing, recursos humanos, finanzas e informática. Se destaca la importancia de la planificación de la mercadería, el presupuesto de compras y la asignación y reposición de productos en las tiendas. Además, se mencionan las estrategias para acelerar la venta de mercancías y la generación de informes para tomar decisiones.

15:02

💼 Equipos de funciones trabajando juntos

Se explica cómo los diferentes equipos de funciones trabajan juntos para entregar la propuesta de valor a los clientes. El equipo de marketing se enfoca en atraer tráfico a las tiendas y construir la marca. El equipo de recursos humanos se encarga del reclutamiento y desarrollo de talento. El equipo de TI asegura la infraestructura adecuada de tecnología y el equipo financiero gestiona los aspectos financieros de la empresa.

20:03

🏆 Claves del éxito en la venta al por menor

Se presentan las tres claves principales para el éxito en una empresa de venta al por menor: números adecuados, experiencia del cliente y posición en el mercado. Se debe identificar un nicho de mercado no satisfecho y crear una oferta atractiva para ese segmento. Se destaca la importancia de los márgenes brutos y la rotación de inventario para generar beneficios. Además, se abordan las métricas y KPIs clave para medir el rendimiento de la empresa, como las ventas en tiendas similares, el margen bruto, la tasa de beneficio antes de impuestos y los estados financieros.

25:04

🚀 Carreras en el manejo de tiendas

Se exploran las dos áreas principales para comenzar una carrera en el manejo de tiendas: roles operativos y comerciales. Los roles operativos comienzan en la tienda con el puesto de asistente de venta y avanzan a puestos supervisores, gerentes de tienda y gerentes regionales. Los roles comerciales incluyen adquisición y mercadeo, donde se requiere un entendimiento profundo de los productos y el uso de la matemática de ventas. También se menciona el área de visual merchandising. Rasha comparte su propia experiencia enfocada y gratificante en la venta al por menor.

Keywords

💡Retail Management

La gestión minorista es el estudio y la aplicación de estrategias para la gestión de tiendas y negocios que venden productos directamente al público. En el video, Rasha Muhammad, fundadora de Retail Dogma, presenta un curso introductorio sobre este tema, abarcando desde los conceptos básicos hasta las funciones clave y el éxito en el sector minorista.

💡Business Model

El modelo de negocio es la estructura que una empresa utiliza para crear, entregar y capturar el valor. En el curso, se utiliza el 'Nine Block Business Model Canvas' para explorar cómo funciona el modelo de negocio minorista, desde la adquisición de mercancías a la generación de ingresos y costos.

💡Key Performance Indicators (KPIs)

Los KPI son medidas utilizadas para evaluar el rendimiento de una empresa en áreas clave. En el video, se mencionan varios KPIs, como 'same store sales' y 'gross margin', que son importantes para medir el éxito y la eficiencia de una tienda minorista.

💡Product Assortment

Un surtido de productos se refiere a la variedad de artículos que una tienda ofrece a sus clientes. Rasha Muhammad discute cómo la selección adecuada de un surtido de productos puede satisfacer una necesidad no cubierta en el mercado y atraer a un segmento de clientes específico.

💡Direct to Consumer (DTC)

Un DTC es una marca que vende sus productos directamente al consumidor, evitando intermediarios como minoristas o distribuidores. En el ejemplo de RX Bars, la marca elige vender directamente a través de su sitio web, lo que también los convierte en un minorista no tienda.

💡

💡Gross Margin

La margen bruta es la diferencia entre el valor de ventas y el costo de los bienes vendidos. Es un indicador crucial del rendimiento financiero de una tienda minorista y se menciona en el video como una parte importante del modelo de negocio.

💡Merchandise Planning

La planificación de mercancías es el proceso de determinar qué productos se deben adquirir y cuánto para cumplir con las metas de ventas. Este proceso es fundamental para la gestión de inventarios y se destaca en el video como una parte esencial de la función de compras.

💡Customer Experience

La experiencia del cliente es la percepción que tiene un cliente sobre su interacción con una marca o negocio. En el curso, se enfatiza la importancia de una excelente experiencia del cliente para el éxito sostenible de una tienda minorista.

💡Retail Categories

Las categorías minoristas se refieren a las diferentes clases de tiendas basadas en los tipos de productos que ofrecen. El video cubre una variedad de categorías, desde tiendas de ropa y accesorios hasta supermercados y tiendas de gasolina.

💡Careers in Retail

Las carreras en el sector minorista abarcan una amplia gama de roles, desde funciones operativas como asistente de tienda y gerente de tienda, hasta roles comerciales como compradores y merecedores. El video ofrece una visión general de las trayectorias profesionales comunes en la gestión minorista.

💡Operational Roles

Los roles operacionales son las posiciones dentro de una tienda minorista que se enfocan en las actividades diarias de gestión de la tienda, como el asistente de tienda y el gerente de tienda. Estos roles son cruciales para la ejecución del modelo de negocio y se describen en el video como el punto de partida para muchas carreras en la gestión minorista.

Highlights

Rasha Muhammad, the founder and president of Retail Dogma, introduces the course on retail management with over 14 years of experience in the industry.

The course will cover the basics of retail management, defining retail, the main business model, functions, and keys to success.

Retail is the final step in the distribution of merchandise, with two main types: store retailers and non-store retailers.

The example of RX bars showcases a direct-to-consumer brand that also uses a wholesale channel to reach a broader market.

Retail categories are based on the types of products offered and can be categorized according to the North American Industry Classification System.

The basic business model of retail involves buying merchandise in bulk at low prices and selling it to the public at a higher price to generate gross profit.

The nine-block business model canvas template is introduced to detail the components of a retail business model.

Retailers can innovate and tweak their business models to grow, such as adding a subscription component or consignment sales.

Core retail functions include buying, merchandising, warehouse operations, and retail operations, while support functions are marketing, HR, finance, and IT.

The importance of merchandise planning and allocation to stores is emphasized for maintaining inventory levels and meeting sales targets.

Key success factors for retail include identifying a market need, having the right numbers (margins, inventory turnover), and providing a great customer experience.

KPIs such as same-store sales, gross margin, inventory turnover, and pre-tax profit margin are crucial for assessing retail business performance.

The career path in retail management can start from operational roles like sales associate and progress to higher managerial roles like district manager or director of operations.

Leadership skills are critical for career advancement in retail, along with business acumen when managing cost centers and having P&L responsibility.

Commercial roles in retail involve buying and merchandising, requiring a deep understanding of products and their performance.

Visual merchandising is another career path in retail that requires creativity and artistic skills, starting at the store level and developing into area or regional roles.

Rasha shares personal insights on the rewarding aspects of a retail career, including dealing with diverse suppliers and learning to think commercially.

The course concludes with an invitation to complete the course on Retail Dogma's website for a certificate of completion.

Transcripts

welcome to this introductory course on

retail management my name is Rasha

Muhammad and I'm the founder and

president of retail Dogma I have been

working in the retail industry for over

14 years across three different

countries

during this journey I worked in

operational roles at some of the most

exciting fashion and Beauty Brands and

was later on higher to fully manage a

fashion brand end to end as part of a

retail conglomerate in the Middle East

you can reach me at my own website or on

LinkedIn

in this introductory course we are going

to go through the basics of retail

management

in particular we are going to Define

what retail is learn about the main

business model the main business

functions and the keys to success for

such a business

we will then go through the main kpis

that show how such a business is

performing and finally we will talk

about careers in retail management so

let's get started

what is retail retaining is the final

step in the distribution of merchandise

products get created every day by brand

owners that might or might not have

their own retail stores these products

then go through different channels and

phases in order to reach the final

consumer they might go directly from the

manufacturer to the retailer who buys

them in bulk or they can go first to a

distributor or wholesaler who buys them

in bulk and then sells them again to a

retailer also in bulk but at a higher

price

retailers then sell the merchandise

directly to the end consumer in small

quantities

there are two main types of retailers

store retailers these are the normal

brick and mortar retail stores

and non-store retailers these include

e-commerce businesses mail order houses

vending machine operators and direct

selling establishments

let's take an example of this protein

bar creator

RX bars has created a nice assortment of

protein products it then needed to get

those products in the hands of the

consumers and for this it used two

different channels

it has chosen to sell directly to

Consumer through its own website and

thereby becoming a non-store retailer

itself

such brands are also called direct to

Consumer brands or dtcs

but in order to reach a bigger Market of

consumers this DTC brand decided to sell

its products also through brick and

mortar store retailers

so it has created a wholesale Channel

where it sells to store retailers in

bulk at lower prices than the list price

and providing them with merchandising

and marketing support to help sell its

own products and these retailers then go

and sell those protein products to their

customers at small quantities and keep

the difference in price

so retailer could be selling its own

product Creations such as the case for

this DTC brand and also the case with

most fashion brands around the world

but a retailer could also be selling

products that belong to other brand

owners such as the case in grocery

stores convenience stores sporting goods

stores department stores small fashion

boutiques and many different types of

retail categories

retail categories are based on the types

of products the retailer is offering and

based on the National American industry

classification system we can categorize

the different retailers into the

following

clothing and Accessory stores furniture

and home furnishing stores building

materials and garden equipment and

supplies dealers electronic and

appliance stores food and beverage

stores and these include grocery stores

supermarkets convenience stores and

specialty food stores health and

personal care stores and these include

pharmacies Beauty Supplies cosmetics and

Optical Goods Sporting Goods hobby book

and music stores

general merchandise stores and these

include department stores Warehouse

clubs and Superstores

gasoline stations motor vehicle and

parts dealers

miscellaneous store retailers and these

include florists office supplies gifts

and used merchandise and finally

non-store retailers and this includes

electronic shopping which is e-commerce

mail orders vending machines and direct

selling

So based on what we have seen a retail

business serves the society in two ways

on one hand it gives exposure to product

creators and manufacturers so they can

reach the final consumer and on the

other hand it brings a relevant product

assortment closures to Consumers where

they can buy it in a convenient way

in the next lesson we are going to learn

how retail businesses make money

the basic business model of retail goes

like this buying merchandise in large

quantities from wholesalers or

manufacturers at low price and selling

it in small quantities to the general

public at higher price the difference in

price is called gross profit this gross

profit is then used to fund and pay the

expenses of the operations and Key

activities of the business in order to

provide such service to the public and

the remaining amount at the end is the

net profit

let's get deeper into the details of

such business model and we are going to

use the nine block business model canvas

template for that

and here I'm going to explain it through

a hypothetical retail business let's

call it Organics which is a store that

sells organic food and produce

we start by defining the value

proposition what is the unique value I

am providing the final consumers that

will make them come and buy from me

I am giving them a nice product

assortment of organic food I am giving

them a convenient way to shop such

products through the stores and our

website and I am committed to provide

them Fresh Products every day

what are the sales channels I'm going to

use I'm going to operate brick and

mortar stores I'm going to sell through

our e-commerce website and I might

launch pop-up shops from time to time

what are the customer segments I am

targeting

I'm mainly targeting health conscious

consumers who are interested in buying

organic food

what Key activities do I need to perform

in order to deliver this value

proposition through those channels to my

Target customer segment

I will need to Source Products

I will need to do marketing and branding

I will need to operate retail stores and

the e-commerce Channel I will need to

manage merchandise flow and finally I

will need to manage the sales process

so what are the key resources I'm going

to need to do all this

I need to run to retail stores I need to

rent a warehouse facility and finally I

will need human resources to perform all

the above mentioned activities

how am I going to manage customer

relationships I will probably need to

have customer service function and we'll

need to invest in a CRM software

what will be my key Partners in running

such a business

my key Partners will include the product

manufacturers the wholesalers and my

landlords

so now after we have laid out all the

different components of the business

model we come to the key part and that

is how are we going to make money

for that we need to identify our revenue

streams and our cost structure our

Revenue stream is the product sales

through the stores and the website and

our cost structure includes cost of

goods sold that's the merchandise cost

store rents paying for Logistics and

warehousing employee salaries and

marketing and advertising costs

this is an example of the main business

model for retailing however retailers

don't necessarily need to stick to this

business model alone they can get

creative by tweaking such business model

in order to grow the business or add

more revenue streams they can use the

same nine block template and start

testing different scenarios to tweak the

business

for example Organics might add a

subscription component where customers

can subscribe and get weekly deliveries

of their shopping list with free

shipping so in this case we can add the

subscription Revenue to the revenue

streams but in order to do this we need

to think about the other components and

see if we need to add to them as well

for example offering such subscription

might need us to invest in owning and

operating delivery trucks

so in this case we will add delivery

trucks to the key resources and delivery

to the Key activities

another tweak to the business model

could be to add a consignment component

to it that is by allowing other sellers

to come and showcase their merchandise

at Organics and sell to our customers in

return for a commission on each sale

in this case we are going to add

commission to the revenue streams and

add the sellers to the key partners

there are endless possibilities of how

retailers can innovate and tweak their

business models to grow their business

I'm going to leave a blank template for

this canvas for you to download from the

attachment so you can test different

business models and ideas and if you

want you can check out our retail growth

and expansion course where we get deeper

into business model Innovation and

present different Alternatives inspired

by other retail and non-retail

businesses so check it out

in the next lesson we are going to

explore the different functions inside

the retail business and learn about the

key responsibilities of each function

in order to deliver the value

proposition to the customers a retail

business needs to coordinate the

different functions of the business to

achieve the desired outcome

there are two types of functions the

core functions and the support functions

the core functions in retail are buying

merchandising Warehouse operations and

Retail operations the support functions

are the functions that support the core

business and build the firm's

infrastructure and these include

marketing HR finance and it

let's take a deeper look into how the

different functions integrate

in order for the business to create a

unique product assortment which is the

main value proposition of the business

it needs to identify and Source such

products at a reasonable cost price and

this is done by the buying function

however for that to happen the buying

function will need to have a buying

budget a dollar amount that they are

allowed to spend on sourcing the

merchandise

this is done through merchandise

planning which is also part of the

buying and Merchandising functions

merchandise planning creates an outline

for what needs to be sourced in order to

deliver the sales budget and gives the

buying team the amount to source with

and then they choose the individual

products and suppliers

but how does merchandise planning know

how much inventory we need to buy

this is based on two things the existing

inventory level that we currently have

and the forecasted sales that we are

expected to deliver

then a certain amount of new inventory

needs to be purchased to support those

sales figures and make sure the business

has enough inventory cover

the sales figures are obtained from the

final sales budget of the business which

is prepared by the finance function in

coordination with the operations

function

if you've worked in retail operations

you might have found an assignment

coming to you asking you to submit a

forecast of how much your particular

stores are expected to make for the next

period for example next year

this is used as an input to create the

final sales budget of the business which

is the main foundation for all the other

budgets including the final p l budget

as well as the buying budget

we explain this in more details in the

retail budgeting and planning course so

please refer to it on how to create such

budget

now that we have the buying budget and

merchandise plan and the buyers have

gone and chosen the products to Source

these products then get allocated to the

stores in adequate quantities that are

fit for each store and after the initial

allocation they get replenished on a

regular basis

the warehouse operations function

receives the order of allocation or

replenishment from the merchandising

function and stores processing it by

preparing the merchandise and then

delivering it to the stores

the operations function at the store in

coordination with the visual

merchandising function then takes the

merchandise from there and from here

another merchandise flow cycle starts

inside the store itself

the primary goal here is to send the

entire inventory allocated to the store

on time with minimal markdowns if

possible

this goal however is not always obtained

and in many cases the merchandising team

needs to use different strategies to

accelerate selling the merchandise on

time so that the new collections can be

launched in the stores also on time

to do this the merchandising team needs

to generate and monitor certain reports

on a regular basis to see what's selling

and what's not selling and to decide on

the options they need to take for those

products

apart from managing merchandise flow at

the store the operations team is also

responsible for delivering the sales

targets delivering a great customer

experience at the store and maintaining

the brand standards at the store by

operating according to the company's sop

throughout the entire process the

support functions operate behind the

scenes to support the core functions

for example the marketing team Works

mainly on driving traffic to the stores

and on building the brand equity and

positioning the brand in the minds of

the target market the HR team

facilitates the high rank of talent and

the talent management and development

process

the IT team makes sure the business has

the adequate I.T infrastructure and that

it's maintained all the time

the finance team manages all the

financial aspects from budgeting to

final reporting

this was in a nutshell how the different

functions work together to deliver the

value proposition to the customer

in the next lesson we are going to

explore the key success drivers for such

a business

there are three main keys to success for

a retail business these keys are they

need the right numbers and the customer

experience

in order to create a value proposition

the business first needs to identify a

need that is not filled by other

businesses in the market or is not

filled in the right way

to do this the business needs to

identify a specific Market segment to

serve and then create an assortment that

will appeal to this segment and then

position the brand in the Target

segment's mind so that they can identify

the retailer and buy from its stores

if we continue with the same example

Organics has identified an unmet need in

the market it realized that there is a

sizable segment of consumers who wish to

be able to eat organic food only and the

different grocery stores in the market

are not feeling this need for them at

the same time those consumers cannot go

and try to Source from Farm producers on

their own every time they need to buy

fresh produce so Organics has decided to

create a product assortment of organic

produce only and brings this assortment

closer to this target segment by opening

brick and mortar stores in their areas

and by serving them through its

e-commerce website

then the marketing team at Organics will

go out and create marketing activities

that will position the brand and the

minds of its Target consumers so that

they will come to the stores and become

customers

however in order for such business to

succeed all the numbers need to work

together

organic produce for example is not cheap

so Organics need to make sure it sells

this product at the right price and

maintain the right gross margin that

will allow you to pay for its operation

and generate a profit at the end

Organics customers are well off and can

afford the premium product like the one

Organics is selling they are also open

to pay for a premium delivery service on

subscription basis which will further

increase Organics Revenue

but what about a retailer serving

value-oriented customers which is a

bigger Market segment but will require

them to sell at low margins

a retailer that decides to serve

value-oriented customers with low price

products might find that in order to

deliver profit at the end the business

needs to turn its inventory faster so

that it can be able to sell at lower

margins and still deliver net profits

if you look at discount retailers for

example you will find that they have

higher inventory turnovers

same is the case for grocery stores and

pharmacies because they sell at low

gross margins

check out our benchmarks page for more

details I'm going to keep a link in the

attachment

so the key is not that the gross margin

needs to be high but rather how all the

numbers need to work together to

generate final profits this requires an

understanding of retail math and how all

the metrics are calculated and more

importantly how those metrics relate

together

we have compiled the cheat sheet for the

most used retail math formulas

I'm going to leave the link to it in the

attachment and for an in-depth study of

retail math and how the metrics work

together I encourage you to check out

our retail math fundamentals course

the final key to success is great

customer experience

you could find an unmet need and serve

it with a great assortment at healthy

margins but for the business to sustain

and grow and also to defend it against

the competition or new entrance you need

to be acquiring more customers and

keeping the existing ones without

churning the key to that is great

customer experience both at the stores

and afterwards this is done by building

and maintaining elaborate standards and

Sops for your retail business and hiring

a skilled operations team that knows how

to maintain this experience throughout

the different stores

a great customer experience completes

the cycle of the success triangle and

ensures that the next time the need

arises for your Target consumers they

will be choosing you again and giving

you even more profits otherwise if they

didn't have a good experience last time

they will escape your cycle and go to

the competition

so these have been the three main key

success factors for a retail business

how to know if a retail business is

doing well

there are different kpis that are used

to give a guidance on how a retail

business is performing these kpis

include

same store sales also known as comps or

lfl growth this metric shows if a retail

business is growing on like for like

basis like for like means that only the

sales of the stores that have been

operational last year and this year are

taken into account

it gives a good indication on the

trajectory of the business especially if

looked at over multiple consecutive

years

another metric for assessing performance

is gross margin

but as we explained earlier different

retail categories have different gross

margins because it depends on the type

of products and the frequency of

merchandise students that's why

assessing gross margins should be viewed

in light of the benchmarks for the

respective retail category and combined

with other inventory metrics

metrics related particularly to

inventory or inventory turnover and

gross margin return on inventory

investment they are combined with the

other metrics as we said to give a

better indication on the company's

returns and how efficiently it's

managing its inventory which is usually

the biggest asset for a retail business

the next metric is pre-tax profit margin

this gives an indication of the

company's profitability after all

expenses and before taxes

in the attached retail math formulas

sheet you will find all the formulas to

calculate the Matrix we just mentioned

finally to assess the financial

performance of the business the three

financial statements should be examined

most of the ratios we've just mentioned

are already calculated out of those

statements

these financial statements are

the income statement or p l the balance

sheet and the cash flow statement

the income statement gives a snapshot of

how the business has performed during a

particular period of time for example

last year or last quarter

when combined with the balance sheet we

can see a bigger picture of how this

business has been doing over the years

and cash flow statement shows us the

movement of cash in and out of the

business

of course there are also other metrics

and kpis that our department specific

and are used to further drill down into

the business performance and find out

what actually is happening and why

we get into the details of such analysis

in our course on retail business

performance analysis so make sure to

check it out when it's launched

there are two main areas to start a

career in retail management

operational roles and Commercial rules

we start with operational roles and get

deeper into it because this is where the

majority of people start their retail

careers

operational Rules start at the store and

the entry level position is the sales

associate

there is typically no experience

required for such a rule

people who show a certain level of

ownership and responsibility can then

progress to supervisory rules

then the next level and the first

managerial role is the assistant store

manager role

the assistant store manager is

considered to be a store manager in

training as he or she shares a lot of

responsibilities with the store manager

when the assistant store managers

develop their leadership skills to the

extent of being able to manage an entire

team and take full responsibility of a

retail store they are moved to store

manager rule

the store manager role is one of the

most important rules if not the most

important role in retail because it's

the link between the store and its team

and the corporate headquarters

the next step after managing a single

unit is to take responsibility of

multiple units and then officially

become an area manager or district

manager

typically a district manager is

responsible for three to five stores

a retail operations manager or regional

manager manages multiple districts

through the respective district managers

and finally the director of operations

is the one responsible for the entire

stool operations in all regions

as you go up this ladder you will need

to develop your leadership skills so

that you can manage bigger teams and

even multiple teams at multiple stores

the number of years of experience

doesn't matter here as much as the

degree to which you are able to

influence other people to get the job

done and how open they are to work for

you

many people get frustrated that they

have been in the business for many years

and seem to be stuck at one level and

not moving forward my advice to them is

always to work on the leadership skills

and show that they can actually lead

bigger teams

when you start moving past the store

level you will start to need other types

of skills in addition to leadership and

that is business Acumen when you aim to

take a management role and start being

responsible for cost centers with p l

responsibility you will need to

understand business because now you will

start to be a business manager rather

than just team leader managing

operational tasks on a daily basis

when it comes to commercial rules these

are roles in buying and Merchandising

they typically start at assistant level

for example a system buyer an assistant

merchandiser and then develop into

bigger roles and reach management level

where the manager is responsible for

multiple buyers or merchandisers for

different categories of products

what matters and Commercial roles is a

deep understanding for the different

products the business is selling and how

they are performing and contributing to

the business Top Line and bottom line

particularly for merchandising rules

understanding retail math is very

important as well as being comfortable

working with numbers and using Advanced

Excel functionalities to generate and

analyze reports

another career area within retail

related to merchandising is visual

merchandising it typically starts at

store level as visual merchandiser and

then VM manager and after that just like

operational rules it develops into area

visual merchandising manager and

Regional visual merchandising manager

where area and Regional VM managers are

responsible for VM across multiple

stores

working on the VM team requires being

more creative and artistic

starting a career in retail could be

very rewarding if you intentionally

manage your own career journey and know

where you want to go and work on your

own development for me personally it has

been a very rewarding Journey that took

me to many countries around the world

attending fashion shows dealing with

suppliers and sourcing products it

taught me how to deal with all the

different kinds of people from different

nationalities and backgrounds and above

all it taught me how to think

commercially and manage a business with

all its different aspects

this brings us to the end of this

introductory course on retail management

thank you for watching this course on

YouTube if you want you can complete the

course on our website for free by taking

the final assessment so that you can

download the certificate of completion

for the course

thank you very much and see you next

time