Temas 10-15 lUX MAN

Lecture 10 – Retail 1 A) Modes of distribution: a) Retail (direct channel) b) Wholesale (indirect channel) c) E-commerce d) Omnichannel distribution B) The key role of the store: store plays a fundamental role in the creation of the customer experience journey it is nowadays considered a real temple for the company, where brands communicate values and provide experiences. C) ROPO: it is today’s customers preference, doing an online research and then acquire the product in the stores. D) The store evolution: a) from small secret boutique to large monobrand strore with many product categories b) from far and mithical to accessible and easy to be visited, c) from only for big occassions to open to various occasions and visitable. D) The brand perception: brand perception and identity are given not only by the product and communication but also by the store and how it is managed. A brand image is given by: store, commercial policies, sales force, product and communication. E) Store classification: 1)  By channel: Directly Owned stores (DOS), franchising contract, wholesale multibrand. 2) By typology: flagship, city, dpt store, seasonal, travel retail, outlets, corners, shop-in-shop. F) Commercial Policies / Strategies: 1) Custom made: made to order products in unique samples from a specific customer brief. 2) Limited editions: small sub-series of products characterized by a small variance of the standard version usually numbered and sold for limited time only. 3) Scarcity: an increase in the demand of a product deliberately reducing the quantity offered in this way increasin the appealing of a product. 4) Private sales: Small sales dedicated to a selected group os customers by invitation only, could be dedicated to new products or to vintage collection with the objective of stock reduction.  5) Sales: limited time price reduction, usually in predetermined periods of the year. 6) Parallel market: penetrating the market with a parallel distribution network, leveraging the price/tax difference in various areas of the world. 7) Stocklist: specialized operatos that buy all the remaining product at 10% of retail price. G) The retail future: stores will follow this trend: growing importance of shopping malls, increasing of total surface, importance of entretainment, grwoth of additional services, store segmentation… H) Illegitimate trade: 1) counterfeiting (closely imitating products) 2) grey market (nonauthorized sales of authentic products) 3) supply chain infliltration (counterfeited products infiltration) 4) Retail service copycat (copy and imitation of entire stores) 5) Factory overrun (overproduction of authorized manufacturers then sold)

Lecture 11 – Retail 2

A) Sales results tracking: controls 4 different business areas (sales, stock, customers, staff). B) Sales productivity: allows to track the store productivity analysing various indicators. a) Sales by sqm b) SKU per sq. mq. 3) Entrance and traffic. 4) Closing ratio/Conversion rate= Nº of transactions / Nº of sales. 5) Avg ticket = Net sales / Nº of transactions. 6) Avg discount= 1-(Net sales/Gross sales)%. 7) Sell trough= unit sold/unit received. C) The retail equation: it is the basic rule to monitor sales in retailing. Retail eq= traffic x conversion rate x avg ticket (transaction size) = sales D) The store success factors: it is a combination of soft and hard elements. a) Hard elements: store layout, location, assortment b) Soft elements: sales force equity, store climate, marketing plans. Store localization is also determinant. E) Leasing contract: a) elements: Duration, rent, key money, early termination, radius clause. b) Practical exercice (calculate the break point) Break point= total base rent (sqmt x base rent) / percentage rent 

Lecture 12 – Retail 3

A) The consumers needs:  when consumers are in a store they want: to touch products, look themselves in a mirros, to be considered etc ; they do not want : to queue up, to find unreadable labels, intimidating sales staff etc. B) Sales force quality: the excellence in store is reached by a continuous impovement in the following sales tasks: a) market/products knowledge b) welcoming to the shop (luxury experiece, high expectation from customers) c) selling ceremony ( can help increase conversion and coverage customer speed). C) Mystery shopping: it is the periodical survey conducted in store to track level of service and shpping experience provided by the staff. a) Characterstics: Consistency in methodology, random results due to few observations (2/3 max) frequency (min 2 per year), long term trends. Questionare: Did the sales advisor approach you in a timely maner? The sales advisor encouraged you to look at yoursefl in the mirror?…