Target Market for the Retail Stores - Essay Example

?Distribution and Retail Table of Contents Question 3 Target Market for the Retail Stores 3 Location of the Retail Stores 4 Impact of the Design and Ambience at the Store 6 Question 2 10 What ECR is? 10 Advantages of Investing in IT System 11 Disadvantages of Investing in Information Technology 12 Justification and Recommendations 13 References 16 Bibliography 20 Question 1 Target Market for the Retail Stores The target market for setting up of the stores of cotton garments in the UK along with distribution of those products in the UK market can be regarded as one of the most significant business decisions for Anthony Connelly. The UK market for the retail store suggests that the prospects of the market demand for products in the garment sector can be identified with regards to the young population of the state. It will become more challenging to create a considerable view of the store on the customers’ mind among the international retail brands present in the UK’s market so as to attain efficiency in terms of product launch. The current UK markets in the clothing retail segments have been compelled to re-evaluate the consumer positioning significantly as because of the low demand along with the real price declining. It has been notably observed by the UK shoppers that the discount stores supply of merchandises with the quality and uniqueness compared to that of the departmental stores (Research and Markets, 2000). It is worth mentioning that observing the market demands and consumer perception, before splitting the departments by male or female clothing or style of the retail operations, is a crucial factor while targeting a market in the retail sector of clothing and garment industry in UK. With regards to the current market scenario in UK, clothing market can be identified as increasingly competitive with more than 20 UK based retailers and brands including department stores, discount stores, super markets, mid-market chains, lower-mid markets, and mail order agencies (Research and Markets, 2000). In this context, the opportunity for the Indian-American apparel distribution can be intended towards attaining a large number of consumer responses with the virtues of quality products which shall be distributed through high street fashion merchandises in UK. The recent growth has been taken place in the women sector which is one of the largest sectors in terms of high selling of merchandises which can also be identified as an advantageous target market segment (Research and Markets, 2000). To be precise, the targeted market for the retail stores in this case can be identified as the young populace of UK irrespective of their income, but subject to their tastes and lifestyle choices. Location of the Retail Stores Defining the store location is one of the most crucial decisions for retail entrepreneurs, as a significant location of retail store can prove to be quite important for generating sustainable customer preferences. The store location of standard and high street fashionable clothing apparels as has been intended to serve by the retail stores can mainly be located in those areas where the young traffic can be easily identified. The demographic variances of the specific location involve citizen’s information, such as age, family as well as the income levels of the population which are the basic factors to be examined before locating any site for retail business, especially in the clothing sector (The Business Link, 2009). The location for the retail site is an essential and fundamental part of the retail strategy as it communicates about the corporate image of the brand. The store location also manipulates the product mix and design of the store. The store location for the high quality apparels on a high street fashion should provide due consideration towards the determined target market segment, i.e. the young population. Thus, the locations where high traffic of young people is observed can be identified as the prospective store location for the brand. The determination of the type of store such as, convenience store, speciality store or a shopping store are also needed to be identified before selecting the store locations (SlideShare Inc., 2012). In the context, the store location can be effectively planned in Greater London for the cotton casual merchandises. Hereby, the location should be in the university or college areas where mostly the traffic of the young population takes place. It is also very important to identify their requirements in terms of updated style along with the availability of the products in the store. As a result, the store location of the merchandises should signify quality assurance along with the highly fashionable goods. The retailer must also consider the demographic segment of Greater London. With due consideration to these prospects, the chosen market of Greater London can be regarded as one of the sophisticated places where the retailer can set up business targeting the younger generations. The locations surrounding the universities, colleges and numerous educational institutions exist. In order to accumulate the desire of the young generation, it is also important to combine the merchandises with fashionable and quality based commodities. Hence, in this context the department store involving casual cotton garments can be regarded as a good opportunity for business in that area. Impact of the Design and Ambience at the Store The overall store productivity depends upon lay out, design and ambience of the store. It is very important to let the customers feel comfortable when they come to purchase merchandises from the store. The availability of spacing along with the product assortments in the store should be in a significant way, so that it becomes easier for the customers to easily find out their requirements. The design and ambience of the store is one of the most important parts of the retail store. The retail stores create self image which demonstrates the type and the quality of merchandises they stock and carry. The purchase encouragement of the consumers can be generated by the store layout and its design and ambience of the different segments within the store. The fragmentation according to the type and size of the products along with the comfortable space between the allocations of the different product lines are also quite important in the store (Stanton, n.d.). Notably, the store image is the overall perception which creates a significant impact on the customers and thus encourages them to visit the store and motivates them to ultimately purchase products attracting them towards the store’s potentials, such as store environment, store designing, visual communication and overall store planning. It is in this context that the store plan is regarded as a systematic process where the merchandise space, customer service department and other non-selling areas are included. This system helps the customers to circulate through the different departments of the store (Stanton, n.d.). In addition, merchandise presentation planning characterises a significant role to maintain the store image as well as encourage a considerable growth in the store’s overall productivity. Merchandising planning involves the allocation of products in such a way that can easily be displayed to the customers through merchandise allocation of the store such as, shelving, hanging, pegging, folding, stacking, and dumping of the merchandises. The psychological factors perceived by the customers also need to be considered when merchandising a store. The psychological factors involve with the exhibition value or fashion of the store, the angles and the sightlines of viewing the products along with the vertical colour blocking of the merchandises in the store. The design and the environment of the store symbolizes the collective aspects which determine the style of the material structure of the location and build a sophisticated atmosphere for its customers that also ensures the store’s image and productivity (Nistorescu & Barbu, 2008). The overall design of a retail store involves with exterior or store front design as well as the interior part of the store, the lighting design and ambience of the store. The exterior design components, including the architectural style of the structure, the colour along with the material of the exterior and interior walls of the building, the outside facade of the store, parking facilities and available space in front of the store, can substantially create a special image of the store amid the customers. The satisfactory management of the exterior elements in a store can lead to the achievement of a competitive advantage in the retail segment. The interior designs of the store have numerous elements and consign to various aspects. Those aspects can be considered as the aspects of the walls, ceiling and floor along with the materials with which they are wrapped. Notably, the interior design can help to create optimistic opinion towards the brand and the image of the store (Nistorescu & Barbu, 2008). Visual communication of a retail store signifies the name of the brand, its logo and retail identity of the store along with its institutional signage, directional and departmental signage, Point-of-Sale (POS) signage as well as lifestyle graphics (Stanton, n.d.). It is in this context that the impact of the visual communication can influence the customer to visit to the store in every season of purchasing products. Hence, it is very important to embellish the store in different and creative way to keep continuing with its customers as well as generating new customers amid the young population. The store layout, designing and store ambience also play an important role in this modern day’s retailing scenario with the increasing productivity. A significant store layout along with an exceptional designing and store ambience has the potential to surmount many of the depressing mind-set or emotions that customers may bear when they enter to the retail store and thus create a positive impression on their buying behaviour. Another important aspect of the store design is often regarded as the theme of the store, which plays an important role to influence a customer to purchase products. In this context an effective environment can increase the productivity of the retail store. The contribution of store image on the success of product selling can be identified with reference to the diagram below: Question 2 What ECR is? ‘Efficient Consumer Response’ (ECR) is a process related with the supply chain management, which efforts to focus on the inefficiencies of inventory control and unnecessary costs at different levels within the supply chain management, especially with regards to the grocery industries. The approaches of ECR system stocks up the products by increasing efforts to decrease the inventory costs along with improving the customer service based on several initiatives (Simon, 1995). The main objective of applying ECR approach in the grocery industries is to eliminate excessive or non value added costs within the supply chain to ensure the better value delivering to the grocery consumers (Kurnia & et. al., ). The initiatives of ECR can be categorised into four main objectives of the approach which includes well-organized replenishment, resourceful store assortment, proficient product introduction and competent promotion (Bhutta, 2004). Notably, well-organized replenishment of products and/or services concentrates on efficient delivery of the appropriate product mix in the store’s shelves. This process contributes toward maintaining the track of the products which are increasingly demanded by the consumers. It also helps to identify the flow of the products as well as facilitate to reduce inventory cost significantly (Bhutta, 2004). In the similar context, resourceful store assortment reflects on the intention to optimize the productivity of inventories and the competencies of the space consumption by reducing the availability of the substitute cheap products in the store. This preparation involves with the category management of the store which ensures to meet the consumers’ desires (Tunon & et. al., 2007). The process of proficient product introduction also helps to reduce those products which are similar to other products. Hence the process helps to achieve the growth of new product in the supply chain management (Tunon & et. al., 2007). Similarly, the role of the competent promotion is to exploit the total supply chain unit and consumer promotion by supporting with constant manufacturing prices. The efficient promotion process plays an important role to avoid the forward and divert practicing in terms of buying goods in the store (Bhutta, 2004). Advantages of Investing in IT System The advantages of the Information Technology (IT) such as ECR in every step of the supply chain management system, which ensures the store to represent the overall products availability and thus helps to identify the proper flow of each product in the store. One of the most functional elements of the ECR module is Electronic Data Interchange (EDI), which plays a spontaneous role in the supply chain management of any organisation offering enhanced inter-organizational communication process to allocate firms the special management of the relationship between suppliers with buyers. Through EDI, ECR and other similar functional elements, IT assists both the organisational and inter-organisational incorporations through proper exchange of system documents which can be updated automatically by a specified computer application, thus making the process time as well as cost efficient. The computer applications are operated in a structured format of a computer which tends to make use of lesser manual effort and time and thus, reduces the chances of errors which are often observed to take place in the supply system (Legris & et. al., 2003). IT method also plays a major role to maintain the inter-organisational relationships between the organisations. The main objectives of the IT process are considered as related with reducing costs of document processing and achieving the organisational objective with efficiency and within a specified time. Hence, IT is one of the influential tools on support of supply chain management for the modern day organisations (Legris & et. al., 2003). The benefits of IT also involve the ability to develop a numerous business services significantly, development in productivity and assisting more rapidly and efficient information exchange with the business partners. Application of IT also leads to reduction in time engaged in the process from recording of the orders to receiving the goods for manufacturing and retail firms. It also assists in the overall reduction of errors combined with manual documents. Data entry, greater sharing of information and greater tracking of market data are also facilitated through IT as a mode of conducting ECR. IT application models also tend to decrease the operation related costs of synchronizing between the firms simultaneously enhancing the communication which takes place between the attach members or groups (Love & Irani, 2004). Disadvantages of Investing in Information Technology The investment made in IT application in a business also raises a few obstacles by conceiving a numerous technical problems in the organisational supply chain management procedure. For instance, the commitment of the top level management of the organisation, assumption for a successful transmission of IT can often result in the changes of the organisation’s structure or the technology used by it, since the power of change confrontation is found within the group. However, in terms of involving new technology in the business organisation the top level management should be adequately aware of the potentials and risks of new forms along with the practice of new technology (Love & Irani, 2004). In order to accomplish the advantages of the IT, the employees need to undergo a training process so as to attain adequate awareness regarding the IT process and thus contribute toward the efficient usage of the tool. In this sector the overall time and productivity may affect the organisation along with the extra expenses. The IT models involve with the organisational internal data and information can also be a reason to lose the opportunity to expand the business with other partners or countries; however, it can also cause a lack of standards which are quite likely to raise considerable difficulties for organisations in its long term performances (Simon, 1995). Justification and Recommendations The overall study based on the relationship among the IT with the business organisations depicts the significant role of the ECR in the modern organisation’s supply chain management. Hereby, the investment decision regarding the IT in Dora’s business can certainly reward significant benefits by making the supply and distribution process smoother, time efficient as well as cost efficient. Moreover, the chances of making errors which could have took place while manually operating the entire business shall also be reduced. This in turn can be expected to give rise to the overall business efficiency accelerating the profitability margin of the business in the long run (Simon, 1995). In this present globalizing market, the increasing competition and changing customer demands along with rising awareness amid consumers, it can be observed that the conventional ways of supply chain management system do not meet the requirements imposed by a dynamic environment. In other words, the supply chain management systems along with other operational processes need to be revitalised through innovation where IT investment can be regarded as a virtuous solution (Kurnia & et. al., 1997). These requirements of an organisation reflects the effective formation of collaboration between the retailers and the suppliers in value chain management involving IT as a powerful tool to implement those processes into practice in the organisation (Simon, 1995). For the smooth and better transaction among the supplier and the retailer, IT takes a major part during the conversation between consumers and sellers as well (Kurnia & et.al., 1997). Therefore, it can be stated that in this modern day context, the implementation of the IT in business is one of the most important aspects to largely enhance the efficiency of the overall organisational operations. The study conducted further signifies the importance of the IT in the business to manipulate in the modern competitive business world. Hence, the proper utilization of the technology during the transaction can be beneficial for Dora’s organisation by generating higher productivity in the long run. However, at times it is very important to be adequately aware of IT functions to prohibit unintentional transfer of insecure transaction by delivering the company’s confidential information during the process owing to the high risk of sharing data through a common network. With due consideration to the implementation of ECR, IT in the business process may affect the organisation by inadequate skilled operators who lack knowledge of the system. It can also raise the limitation in terms of unwillingness of the customers to share experience. The enabling of the ECR model in the business may also give rise to many challenges during the trading with the partners (Kurnia & et. al., 1997). With due consideration to the above discussion, it becomes quite apparent that IT investment can have both positive along with pessimistic or negative impacts on the overall organisational competencies. Where on one hand, IT tends to enhance the quality and efficiency in product and/or service delivery system along with consumer satisfaction level through ECR; it also tends to hinder employee productivity level by imposing changes and requirement of additional resources, thus giving rise to capital employed (Brynjolfsson & Yang, 1996). Hence, Dora should emphasise on a budget planning which would assist her in developing a quantitative planning regarding the investment required for implementing IT and also the estimated return that can be obtained through the developed process. To be precise, Dora should certainly opt for investing in IT following extensive planning, especially regarding the capital to be invested and the managerial strategies needed to be considered while involving the ECR process. References Bhutta, M. K. S., 2004. Efficient Consumer Response: Some Global Issues. ECR Initiatives. [Online] Available at: http://www.swdsi.org/swdsi05/Proceedings05/paper_pdf/Bhutta_ECR_SWDSI_05formatted%20(T3D1).pdf [Accessed April 20, 2012]. Brynjolfsson, E. & Yang, S. 1996. Information Technology and Productivity: A Review of the Literature. Advances in Computers, Vol. 43, pp. 179-214. Kurnia S. & et. al., 1997. Efficient Consumer Response: A Preliminary Comparison Of U.S. And European Experiences 1. 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