The Mantra Of Success In Retail
In today's world it is hard to survive in any field of industry,as today there is a rat race in all the fields. So to survive first we have to know what actually is "Retail" and what are the peripherals of the Retail Industry so that we can act accordingly
In today's world retail industry had proved itself as one of the biggest market for jobs. And as more and more retail industry are coming in India the level of knowledge and skills required had gone very up. So with the help of this blog you will be aware of some important keywords of the industry and will help you to take one step ahead of others
For a Fresher , who is not aware of the general terminologies of the retail industry ,these terms will help them to understand the basic functionality of the business. these terms are as follows :-
- Basket Size
L2L basically stands for Like to Like. This term basically means we compare a specific month sale with the sale of same month in previous year. To be more precise and clear let us take an example. The Sale of Jan 2014 and Sale of Jan 2015 , this kind of comparison is called Like to Like comparison.In any retail industry we generally compare our growth or d growth comparing the sale of last year , like if in the month of July 2014 a store did X Lakh then on an average next year in the month of July if we would be taking the target then the minimum target would be (X+20%of X) lakh. If we are planning to make any strategic plan for a month then the first and foremost point is the target of the month.
Depending upon the industry to industry the percentage of growth that i have taken may vary i.e 20%. There are different terms which are used for the same concept i.e it is also called as Year On Year etc.
YTD stands for Year Till Date. The financial year starts from April , so the total sale value that a store or an industry had achieved. For Example take the following figure :-
April 2015 - 50 lakh
May 2015 - 65 lakh
June 2015 - 55 lakh
So if we talk about YTD figure, it is = (50+65+55 ) lakh
The total YTD figure includes the figure starting from April till March of an year.
MTD stands for Month Till Date. Similar to YTD it is the number achieved by any store till a specific date of the month starting from 1st of that month. For example if today is 15th of July then the MTD figure would be the total sale of 1st july till 15th july.
SSPD Stands for Sale per Square feet Per Day. It is one of the most important term which is used in the retail industry. It is one of the term which helps in analyzing the statistics of the retail store. First the formula of SSPD = sale of the whole month /(total carpet area*30).
with the help of this formula we can calculate how much sale per square feet sale is the store generating. With the help of the data we can analyzed the performance of the store , the trend of the store, and accordingly plan can be formulated.
To make it simpler lets take an example :
let us consider a store with the following statistics , Store size 5000 sq feet , sale in a month Rs 15000000. So the SSPD will be 15000000/(5000*30) = 100. So the average sale that 1 sq feet tile generate is Rs 100.
The basic meaning of the Basket size is the average number of article per bill. For example let us consider a situation where in a store the total number of bills which were cut were 20 and the total number of articles which were sold in whole day was 40. So the basket size would be :-
Basket Size = total number of article sold/ total number of bills cut
So basket size = 40/20 = 2
Which shows that the average number of article sold per bill is 2.
It stands for Key Performance Indicator. It is the set of indicator on which the performance is measured. In simple terms the KPI generally indicates all those parameters that helps the strategist to analyze the performance of the store
It stands for Cost before advertisement. The basic meaning of this term is that it calculates the income of the store after deducting all the kind of expenses which incurs while operating at the store. There are different kind of expenses that a store incurs depending upon the type of store. In practicality there are basically there kind of retail store, which are:-
- COCO- Company owned Company Operated
- COFO- Company owned franchise operated
- FOCO- franchise owned Company operated
- FOFO- Franchise operated Franchise operated
For Top management the point of evaluating the performance is based on the CBA.