How Retail Operations Management Objectives Can Best Be Achieved

Retailing is now one of the world’s largest industries and it is in a permanent state of change. This change has been accelerating over the past decade, (Zentes et al. , 2011: Pg. 1). This sector is not only more competitive than in the past but the consumer is also increasingly more demanding and more complex, (Gordon et al. , 2006: Pg. 22). Retailers have to predict the desires of fickle customers, buy and allocate complex sets of merchandise, set the right prices, and offer the right promotions for each individual item.However, there are often wide gaps between supply and demand, which leave retailers holding too much of what customers don’t want, and too little of what they do’, (Friend and Walker, 2001: Pg. 133). This is a huge challenge which faces the retailer of today. Fisher et al. , (2000: Pg. 115) maintains that retailing’s formula for perfection is offering the right product in the right place at the right time for the right price. This is no e asy feat for the retailer and with merchandising decisions becoming more complex, the penalties for errors too are even steeper, (Friend and Walker, 2001: Pg. 33). This is why Gordon et al. ,(2006: Pg. 24) notes that in today’s cutthroat market, there is no place for a ‘head in the sand’ attitude. The importance of the areas of ‘retailing’s formula for perfection’ as stated by Fisher et al. , (2000) will now be examined theoretically and subsequently researched in the context of a successful, independent fashion boutique, Emporium Kalu. Right Product ‘Retailers capture their customers’ interest by the nature of their product range’, (Varley, 2006: Pg. 8).Fashion markets have become increasingly complex with consumers fragmenting into small groups who have very different needs and demand very different products. Varley, (2006: Pg. 8), maintains that product helps to position a retailer against it’s competitors within a given market, but problem many companies today face is that they sell very similar products and services to those of their competitors, (Ingenhoff et al. , 2010:83). Therefore, tremendous pressure is put on retailers to offer the customer something different, (Dvorak et al. , 1996: Pg. 121). In making roduct decisions for individual stores, buyers and retail managers have long relied on instinct, (Friend and Walker, 2001: Pg. 133) but in today’s marketplace many more factors need to be considered. What is at the core of the ‘right’ product is the retailer’s target market, they need to be given a good reason to choose one retailer over another, (Varley, 2006: Pg. 8). Four major trends which affect the consumer’s choice of product have been emerging in recent times.Since the consumer is at the core of what the ‘right’ product is, the retailer must pay attention to these trends and how they relate to their target customer. . The Savvy Co nsumer Whether you are a value fashion retailer or a high end department store, it is necessary to acknowledge that today, the consumer is more tuned in to the latest trends and styles in the fashion industry. Consumers have become more savvy about fashion as they can now access information about various fashion events around the world almost immediately through internet media like blogging, video sharing and podcasts. An increased number of weekly glossies, e. g. Grazia, also fuels this consumer demand for the latest look at a faster pace (Barnes, 2006:260).The consumer now knows what ‘should’ be in-store and retailers will suffer if they cannot provide this to their customers when they expect it. 2. Celebrity power Many Irish consumers find their fashion influenced a great deal by celebrities, with this being the most likely facet of their lives to be influenced by celebrity culture, (Mintel, Clothing Retailing-Ireland, 2011). Star style has never been more accessible . As a result of this constant exposure to celebrity lifestyle, 8% of Irish consumers claim that celebrities influence their purchases, (Mintel, Clothing Retailing-Ireland, 2011).This report continues to detail how this high level of interest in celebrities and their lifestyles is beneficial to the clothing retailing market and can be used as a tool to attract consumers by adding value to a clothing retailer’s product range, and help to drive sales. This can be seen when brands of clothing celebrities wear or clothing lines where a retailer collaborates with celebrities and well known fashion designers become popular. â€Å"In a celebrity-obsessed world, it’s no surprise that we all want to copy what famous faces are wearing†, (www. gsn. com, 2010). Celebrities, according to Olympio, (2007) represent a â€Å"glamour that most of us have idolized and wanted for our own†. This concept can be said to be the reason why people emulate styles they have seen on celebrities, for example, Joan Collins, who in the soap opera ‘Dynasty’, made shoulder pads a signature trend of the 1980’s. This can also be seen today where Sarah Jessica Parker, in ‘Sex and the City’ helped make Manolo Blahnik, the shoe designer, a household name, (www. wgsn. com, 2010).Retailers who choose to sell brands that are publicly linked or associated to a celebrity will stand to be of benefit if their target consumer aspires to be like said celebrity. 3. The Concept of Fast Fashion Gordon et al. , (2006: Pg. 22), remarks that retailers have to deal with constantly shorter product lifecycles. Fast fashion is a business strategy which aims to get new fashion product into stores in the shortest time possible and reduce the processes involved in the buying cycle consequently satisfying consumer demand, (Barnes et al. , 2006: 259, Bruce et al. , 2006: 330).This notion of consumer demand driving the fast fashion industry demonstrates the need to have the ability to act accordingly and respond quickly to these demands. Today, successful fast fashion companies have been moving away from the traditional fashion buying cycle of seasonal forecasting from historical sales one year in advance, (Bruce et al. , 2006:330), to creating smaller collections more frequently, (Barnes et al. , 2006: 261). Barnes et al. , (2006: 261), believe this is as a result of fashion trends being moulded by â€Å"what is happening on the street, in clubs, lifestyle hotspots and not 12months in advance of a selling season†.Long buying cycles have become inappropriate for the demands of modern fashion consumers. Bruce et al. , (2006: 329), maintain this is because fashion consumers â€Å"expect and thrive on constant change and so new products have to be available on a frequent basis†. It is no longer sufficient for retailers to have the same collection in-store all season; product ranges need to be constantly refreshed in order to be à ¢â‚¬Ëœright’. â€Å"Quick response is a concept that has become synonymous with the textile and apparel supply chain†, (Barnes et al. , 2006: 263).This approach to supply chain management is regarded as information driven, minimal pre-season ordering is engaged in and more frequent, in-season small orders are placed to take advantage of improved speed and flexibility, (Christopher et al. , 2004 as cited by Barnes et al. , 2006: 263). This quick response method allows companies to respond almost instantly to catwalk trends that would appeal to their target audience, therefore providing them with the ‘right’ product. The success of this high volume/low cost business model is down to constant and regular updates of fashion collections.For these types of retailer, (value) this has historically been the ‘right’ product as it satisfies the need for ‘newness’ by the consumer at a low cost, something which is central to what their target market seeks. 4. Quality Vs. Quantity: Durability has been found to be a key concern for Irish consumers as four in five R. o. I. consumers claim to make their clothes last, (Mintel, Clothing Retailing-Ireland, 2011). With the occurrence of the recession, consumers are more inclined to want to get the best value for money out of all the products that they buy.In terms of the clothing industry, they are increasingly likely to claim that they make their clothing last a long time. According to Mintel (2011), 81% of R. o. I. consumers agree with this statement as they note between 2007 and 2010 there was an 11 percentage-point increase in agreement with this statement among R. o. I consumers. This highlights that Irish consumers, are increasingly moving away from disposable fashion (i. e. clothing that they may only wear a few times), and towards buying clothing that they expect to last a long time, illustrating a higher demand for quality.Consumers who are now searching for high qualit y investment pieces that will last are driving sales within the premium womenswear market. â€Å"Nearly a quarter (23%) of women are opting to invest in fewer items of superior quality clothing that will last, a substantial increase of 10 percentage points since 2010†, (Mintel, Is the Era For Fast, Disposable Fashion Coming to an End? , 2011). While consumers may be seen to be cutting back in the recession but they are still willing to pay for high quality clothing, (Mintel, Clothing Retailing-Ireland, 2011).With this trend growing, it is necessary for the retailer to evaluate whether their target market is interested or seeking this quality in order to provide the ‘right’ product to them. The type of product on offer in Emporium Kalu has been described as having ‘fashion aesthetic that is unlike anything you will find anywhere else in Ireland’, (Harris, 2011). The Emporium Kalu customer is a ‘business woman, a student, a mother, a grandmother, anyone who wants to be feminine, elegant and unique. She appreciates beautiful design, stunning quality fabrics and subtle detail.She likes to wear timeless, great fitting pieces but puts them together in an individual and personal way’, (Louise Flanagan, co-owner of Emporium Kalu, 2011). The owners of the boutique, who are in business nearly fifteen years now, really know their customer. They have fantastic know-how on what customers want, (Harris, 2011). They pride themselves on offering their consumer exclusivity and uniqueness in their labels, (Louise Flanagan, 2011). They deliver on this by offering high quality brands such as Giles, Galliano, Maria Grachvogel, Alice by Temperley, M Missoni, Vivienne Westwood Red Label, and D&G.Kate O’Dwyer, (co-owner of Emporium Kalu) has stated that ‘even if we have a label that might be stocked somewhere else, we buy it differently. We buy it with the Emporium Kalu attitude. So it is always different to what you will fin d elsewhere’, (as cited in Harris, 2011). They are constantly searching for the ‘next big label’ so keeping a close eye celebrity fashion is a must. It is through this product differentiation and clear focus on their customer that Emporium Kalu have succeeded in buying the ‘right’ product for their store.Right Place/Location ‘A common cause of business failure among retailers is the selection of the wrong store location’, (Mazze, Pg. 17). Zentes et al. , (2011: Pg. 203), agrees and adds that a good location can lead to strong competitive advantages as location is ‘unique’ and thus cannot be imitated by competitors. It is necessary however for the location of a store to be appropriate to the retail business because in order to reach the right kind of customer it is important for a store to be in a street that reflects its image, (Varley, 2006: Pg. 173).The success of a retail store depends on many factors such as the storeâ⠂¬â„¢s location in relation to the region and the state, its situation within the community, its location on the street or in the shopping centre and the characteristics of the community and trading area, (Mazze, Pg. 17). The retailer also needs to take into account, the customer’s perception of the shopping task. Mazze explains this consideration in that a customer who wishes to obtain speciality goods like gourmet foods is not greatly concerned with how far he must go or the length of time it takes to get them.This implies that store location can be directly linked to the merchandise available within. This theory put forward by Mazze can be seen in practice by Emporium Kalu. The store is located in Naas, Co. Kildare, Ireland. This is not a large, heavily populated city with substantial daily footfall. It is a relatively small commuter suburb where many people reside but work in capital city Dublin. The store itself is positioned on the corner of a pedestrianised lane which meets the main street of Naas.This location ‘offers the kind of environment that attracts a more discerning shopper ‘, (Varley, 2006: Pg. 173). While Emporium Kalu’s location may not be preeminent, it offers the product ranges and service that consumers are willing to travel for. The owners leverage it’s merchandise and style expertise in a way that makes up for what it may lack in store location, so much so that it has been honoured with being ranked as one of the fifty best boutiques in the British Isles, (www. telegraph. co. uk). Right Quantity at the Right TimeVarley, (2006: Pg. 110), holds that getting the ‘right’ quantities of merchandise delivered into the retail organisation at the right time is necessary to satisfy both basic customer needs and retail management goals. The implications of getting product levels wrong are great; too much stock will threaten the profitability of a range and increase holding costs and too little stock wil l cause a loss of customers and sales, both direct and complementary. These errors can occur as a result of late deliveries, late orders or choosing the incorrect size mix.Choosing the perfect size configuration for a company store program requires careful calculation, (Cook Kimbrough, 2008: Pg. 36). A retailer must decide how much of a particular product line is needed for their store, (Varley, 2006: Pg. 110). Similar to the other ‘right’s, this decision is highly dependent on a fashion retailers target audience. Cook Kimbrough, (2008: Pg. 36), is of the opinion that a good rule of thumb is to think of the bell curve when choosing your sizes for your range. Sizes in the middle tend to sell about twice as much as the sizes at the extreme.As can be seen, the ‘right’ quantity includes many different factors and cannot be considered independently. Emporium Kalu operates with an exclusive image. They pride themselves on offering product that is ‘different to what you will find somewhere else’, (O’Dwyer as cited in Harris, 2011). They achieve this exclusivity factor through both the labels they offer and through their size configuration. They are not the business of mass selling product. ‘We want the consumer to feel special when she wears her clothing and she can be confident that she will not see other people wearing the same outfit.That is why we buy our ranges relatively wide as opposed to deep’, (Louise Flanagan, 2011). Therefore, the co-owners do not purchase large quantities of each style in-store which creates the ‘exclusive’ feeling. This strategy has proven to be extremely successful for this boutique and is the ‘right’ quantity for their customer and their retail organisation. Right Price Setting prices in today’s intensely competitive and dynamic retail environment is a complex task and developing a detailed understanding of consumer behaviour and buying patterns lies at the heart of any successful pricing strategy, (Gordon et al. 2006: Pg. 22). Retailers can use price in conjunctions with product quality, customer service quality and selling environment to make a very clear statement about the image they wish to communicate and about where they belong in the market, (Varley, 2006: Pg. 13). Therefore, pricing is directly linked to a retailers specific target market and the level of product quality they offer. This is clearly seen in the three main retailing pricing structures that Zentes et al. , (2011: Pg. 256) puts forward; 1. Value/ budget Price: Focuses on low cost and high volume selling of product. 2. Medium Price: Focuses on 3.Premium Price: Focuses on attracting customers who are less concerned with price and more interested product quality and prestige. In order for a fashion retailer to succeed with their pricing structure and charge the ‘right’ price, product quality and consumer expectations need to be aligned. Empo rium Kalu is positions themselves in the premium price segment. They attract the type of consumer described in this segment by Zentes et al’s, (2011: Pg. 256). Kate O’Dwyer verifies this and states that ‘we're about beautiful pieces because there are people who appreciate the special and unique’, (cited in Harris, 2011).Whilst on buying trips, price is not at the forefront of the minds of the co-owners, it is more about whether the collection and quality is a good fit for the store and their customer, ‘if we love a piece, we have to have it’, (Flanagan, 2011). This pricing structure prevails for Emporium Kalu as they attract customers who are in pursuit of product prestige and service over lower cost. Right Personnel What has not been included in the ‘retailing’s formula for perfection’, and should be considered as a new addition, is having the right personnel to carry out the final step in the retailing process, that is, s elling product to the consumer.The rational for this inclusion is for without converting store visits into sales, the bottom line cannot be achieved and the other ‘rights’ are meaningless. Kotler et al. , (2005:446), too acknowledges personnel importance and states that it is a key way for a brand to stand out in the mind of the consumer is through providing top quality service as service is important to customers. Having the right personnel in your store can be an invaluable tool in creating and retaining customer loyalty. Individual help by floor staff, personal shoppers or stylists will enhance the customers experience and perception of the brand.For â€Å"it is here at the customer interface that business is either won or lost†, (Jackson et al. , 2009:84). This idea of the right personnel is central to the store offering in Emporium Kalu. The owners Louise Flanagan and Kate O’Dwyer, right from the beginning were focused on not only providing the custom er with exceptional quality products and brands but also exceptional service, (Louise Flanagan, 2011). This outstanding customer service is delivered through unrivalled, individual styling and advice, personal tailoring on garments, an in-store deposit facility and one to one after hours service if required.Co-owner Louise prides the store on having staff who provide first class, attentive assistance for all customers who walk through their doors, (2011). The consumer and their requirements are valued and are given the upmost consideration. This she believes, in part, is the way forward for independent retailers today. Offering the customer more than just a product but an enjoyable experience and advice they can trust so they feel confident in their clothes too. ConclusionIn order for a fashion retailer to achieve its retail operations objectives a number of considerations need to be taken into account and the customer is central to each. When choosing the ‘right’ produ ct, the target customer needs to be at the core of all decisions. Trends in their choices, spending power and what influences them are fundamental in selecting different collections. The product has to have the ability to satisfy the consumer, (Varley, 2006: Pg. 76). Jackson et al. , (2009: 83), maintains that uniqueness in product, a high level of quality and providing unique product benefits are a â€Å"critical differentiator in fashion†.When choosing a retailer’s location, in order for it to be ‘right’, the customer’s perception of the shopping task and the characteristics of the community and trading area need to be considered. If chosen appropriately, location can be a source of competitive advantage. Getting the quantities of merchandise ‘right’ for a retail organisation is highly dependent on a fashion retailers target audience and they what they require. It is a decision that cannot be made independently and is affected by timi ng and sizing issues.In order for a fashion retailer to succeed with their pricing structure and charge the ‘right’ price, product quality and consumer expectations need to be aligned. This will create loyalty among customers if a retailer can deliver on their pricing structure. The proposed additional ‘right’ of retailing, the right personnel could prove to be key in gaining a competitive advantage in the marketplace today. Offering the customer benfits other than the product like an enhanced in-store experience will aid the fashion retailer to endure the current difficult market conditions.