Session @ CBS by Mr.K. Radhakrishnan, Chief Executive Officer, Reliance Retail(Hyper)
"Retailing is simple, but it aint easy". A statement that has defied the test of times, be it the Wal-Marts of the world or the next door Kirana wala. This very fact emerged even more realistic as Mr. Radhakrishnan, CEO, Reliance Retail (Hyper), took us through a real time journey in to the world of Assortment Planning. A session that took us beyond the realms of detailed theory to experience the real world approach to one of the most important pillars of efficient customer Response (ECR). i.e., Efficient Assortment.
A well planned assortment in a retail store is one of the critical factors that drive customers, as it defines the real value to the customer. Value!! A tricky word that is, had always been yet another "low price tag-low value" funda. This myth got shattered as Mr. .Radhakrishnan made us realize that low price doesn't always translate into low value. It is nothing but a game of price and other attributes that establish a product's perceived value to the customer; at the same time ensure that the game is a "win-win-win" proposition for the customer, retailer and the manufacturer. A statement that yet again redefined that retail isn't an easy game after all, a game played in and with the minds of the customer!!
We got an insight into the years of experience and practical learning that weaved various success stories in the retail arena, as he introduced us to an important tool which helps the merchandiser to strike a trade off between retailer productivity and customer satisfaction. The Category role matrix helps the retailer classify merchandise bricks based on the level of gross margin and sales volume on a high/low scale. This helps in various assortments level decisions that form the crux of merchandising.
Understanding merchandise hierarchy made us realize that planning is that thin line that rules a game well played and won
Every game has its own set of rules, so does merchandise assortment planning, rules that can redefine a category. We, the future retailers were exposed to five rules to get a high five with a merchandise category!! However, science is always not the solution, but an aid. It all boils down to common sense when a merchandiser takes deletion decisions. For example, deleting range building SKUs can have a suicidal effect on the customer's needs.
If science is one block in the big retail puzzle, we realized other bodies of knowledge such as economics, marketing, psychology also make up the retail pie. Brand Equity and Elasticity of demand are some concepts that can turn the tables around for retailers.
"Its all in the mind", How true!! Planograming using the technique of mind mapping re-enforced the statement .To sum up the session in few words is as difficult as retail, yet as fun and challenging as the same. It proved to be a highly informative and down-to-earth session.
Contributed by Binoj, Kunaal & Ramya of Retail Varsity CBS-Main Campus