Retailing is considered as one of the most nimble industry,
where the manager comes in contact with the customers and responds to their
needs everyday. To be successful in the competitive arena, retailers must be
able to convince the shoppers, that they can satisfy their needs better than
their competitors. Retailers are always looking for ways to replace slow moving
categories with specialty formats. In today's arduous economy, retailers are
trying hard to increase the efficiency of their supply chain in order to
decrease their risk and increase their profit margins. Organizations seek new
technology to enhance their businesses. Businessmen think many times before
taking new expenditures and only investments with shorter pay back period are
chosen.
Right sizing for Excellence:
Retailers require an approach to improve their gross margin
returns per sq. ft, when the sales figures are weak. 'Rightsizing' is a retail
process which involves trimming the size of the store and purging off the slow
moving products. These products are in turn replaced by specialty formats or
shop-in-shop model. Big retailers chose to set up specialty zones under the
shop-in-shop models. This approach enables to increase the revenue of the
organization. It facilitates optimum utilization of the available shop space in
the best possible way by reducing the space occupied by products that are slow
moving. This facilitates the consumers to shop according to their preferences. During
the period of recession shop-in-shop is the best way to leverage the field
knowledge of specialty retailers and increase their profits.
Right sizing enables a complete visibility of the product
throughout its life cycle from capacity and raw material reservation, costing
negotiations, tracking, and logistics. Its framework consists of strong
collaboration, and reporting tools. This process helps the management to take
proactive decisions about the life cycle and supply chain activities of the
product.
The imperative question ringing in the back of every retailers
mind is about the necessity to have and invest in a business intelligence
system. Once a retailer has successfully established himself in a market
position, he then aims for an accelerated growth in the concerned segment. He
needs to build a top-line by expanding multiple geographies and maintain
operational profitability. He must fine tune his position by analyzing the
behavior of the shoppers. Once, a retailer attains the maturity stage in his
business, externalities play an integral role in his further growth.
Right sizing helps the retailers to obtain competitive
advantage, and aid the supply chain to gain greater value through consumer
collaboration. When a retailer recognizes his position in the evolutionary life
cycle, needs and priorities, and utilizes them to guide his investments in
business intelligence systems, he will be able to make sound decisions as the
right time.
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