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MKTG1332 Fashion Retail Management Assessment 1 - Semester 2, 2016

WORKSHOP PRESENTATION & LEARNING ACTIVITY

Week 8: Store Operation

GROUP MEMBERS: 1. Le Thuy Linh Dan - s3501307 2. Nguyen Khanh Linh - s3515239 3. Nguyen Truong Hai Ninh- s3516365 4. Tran Han Hao - s3515229

Table of Content What is Operation Management for Retail?

1

Productivity

1

Customer

2

“Click & Collect” service

2

Maintenance

2

Inventory

3

Insurance

3, 4

Security

4,5

Loss

5, 6

Credit Management

6

Crisis Management

6

Crisis Management of Fashion Brands

7, 8

Research & Development

8

“Mobile Boutique” - Unique Retail Operation

8

Reference list

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What is Operation Management for Retail?

Definition: Performance of procedures, policies & task to make sure our retail store to work properly (Dhoul, 2014).

An efficient & effective operation will help the company to: + Improve staff efficiency, control inventory & reduce risks. + Satisfy not only Customers but also our employees.

If our employees perform well, it can improve customer's experience in our store.

Example: If the cashier can receive the purchase so quickly, customers will not have to wait long.

--> Avoid the risk that they might complain.

Productivity According to Business Dictionary(n.d), productivity is a measure of the efficiency of the operation that the inputs (labor, capital, raw materials, energy‌) creates the outputs (quantity, value).

Input

Output

Employee performance

Saved time, Customer satisfaction

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Customer Satisfying customer is one of important thing in retail.

The operation management can help you to achieve it through: + THE STORE FORMAT (How the store organized to make it comfortable for customer to move and can see and find all the product that stock) (Fashion & textile, 2014) + CUSTOMER SERVICE (help customers to select, show new arrival items solve customer’s inquiries then complete the necessary financial transaction if the customer decides to make a purchase).

There are many ways to provide services to our customers, it could be done in-store or online. Due to the competitive market, many retail stores are trying to give customer a new way for their shopping experience. For instance, “Click & collect" can give the customer a new level to shop.

“Click & Collect” service The concept is very simple and very counter-intuitive. Customers can buy something online.

Then, rather than wait for the postman to ring the doorbell for many days later, customers can go to the shop and collect it themself.

The benefit of the service is that customer don't have to wait for the purchase at the shop. They can avoid the out-of-stock or not having the right size when shopping in-store.

Source: https://www.youtube.com/watch?v=rZPYW6IPMTw

Maintenance Without being maintained, a facility can not perform at peak efficiency. Therefore, the maintenance operations take the responsibility of remaining the store and its systems and equipment to operate their intended function. This activity requires a specific maintenance procedures.

They are also in charge of training the staffs in analysing, monitoring and requesting maintenance if needed.

Moreover, they have to maintain the merchandise displays and store formatting.

Maintenance involves day-to-day activity, which is working before store hours to guarantee the store and products are nicely presented. (Blackboard Rmit, Week 8)

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Inventory Inventory management includes: - Check the quantity and other details like color, style, sizes when receiving the merchandise.

- Place the inventory on the sales floor to sell - Pay the suppliers - Track the inventory to know what is well sold to re-order and making markdowns on the unsold products.

- Return the damaged inventory to suppliers Control the inventory: + Create policies and procedures for storage management + Manage the inventory stored in the warehouse + Manage stock inventory control: + Create policies and procedures to control stock inventory: arrival, size runs, merchandise's movement from warehouse to sales floor + Create procedures for stock replenishment + Stock delivery contingencies evaluate and control documentation and reports on stock inventory - Take out the merchandise to ship it to the customers.

- Remain the supply chain management of inventory running smoothly - Make decisions on: + The quantity of inventory on sales floor and in the warehouse + The frequently of rotation inventory from non-selling to selling areas + Inventory functions during non-business hours + The acceptable percentage of damaged inventory + The method of shipping to the customers + Evaluate and control documentation and reports on stock inventory (Mehra, n.d)

Insurance Why we need insurance?

Insurance is a legal requirement to protect the employees from accident and injury at work, to protect the business from risks and to protect the business from fire or environmental disasters: flood, tsunami, earthquake, famines... (Ariva.co.uk, n.d)

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Types of insurance: - Personal coverage: death, disability - Risk policy - Property insurance (pay on behalf of owner for fire policy and public liability): To protect the equipment, computers, inventory,... from fire, theft, damage,... Also protect the company's earnings if the business is interrupt.

- Work-coverage: protect the employees from missed wages because of illness.

Security Employee theft, vendor fraud, return fraud, credit fraud, shoplifting, and administrative error are all contributing factors that make a company unsafe. These solutions can help the company to manage the security: - Setting camera: Setting camera help us to watch for what happen in the store. This also helps the police find the thieves.

- Bodyguard: We also realize that it is very necessary to hire the bodyguard to be able to interfere the problem immediately.

- Work- coverage: protect the employees from missed wages because of illness.(Blackboard Rmit, week 8)

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- Many retailers seem to think clothing thieves only steal merchandise inside of fitting rooms. Sure, fitting room theft happens a lot, but most shoplifters looking to take merchandise simply conceal the selected items right there on the sales floor. In their efforts to help curb the increase in shoplift activity, retailers must consider putting security tags on clothes.

Security tags on clothes provides two things, an obvious deterrent to would-be thieves and a sense of security to the business owner and management. A clothing alarm used with a Checkpoint security system allows the merchandise to be shopped, without the inconvenience of being attached to a fixture display.

Loss Shrinkage can result in business changes, such as increased prices, decreased employee bonuses and overall loss of sales.

Reasons for loss and Solutions: I. Shrink Caused by Theft:

In the United States, theft is by far the biggest cause of shrinkage and financial loss in 2013(Fairchild , 2013).

-> Solution: Use the solutions of security above.

Moreover, product placement within the retail location is an important method used to reduce the loss of the most valuable items. Methods such as placing valuable items in cases, on locked hangers and at the back of the store, as opposed to near the entrance, helps reduce inventory shrinkage caused by theft.

II. Operational Caused Shrink:

- Employee theft - Production planning caused shrink includes over-production, under-production, unsanitary production and/or failure to accurately plan or calculate Production needs to meet anticipated sales.

- Obsolete Products - Damage - When inventory is damaged, the damaged products lose value and cannot be sold. There are many reasons why inventory may be damaged, including employee and customer mishaps, natural disasters and equipment failure.

- Inaccuracies in inventory counts and paperwork 5

-> Solution : -Train staff & Employee integrity reduce the potential for employee theft, while training provides employees with the tools they need to reduce theft.

- For damaged products : This type of inventory can be controlled with proper product placement, employee training and business interruption planning and insurance.

Credit Management Credit management is the process of controlling and collecting payments from customers. This is the function within a bank or company to control credit policies that will improve revenues and reduce financial risks (Wikipedia, n.d).

Credit fraud is a huge problem in fashion retail, or any retail.

In designing a credit plan decisions need to be made concerning the following issues: -What form of payment is acceptable? Cash only, credit, check?

-Who administers the credit plan? The retailer? The bank? The credit card company?

-What are a customer’s eligibility requirements for a check or credit purchase?

- What kind of personal identification is required?

-What kind of credit terms will be used? Credit card only? Billing?

-How will late payments, non-payments be handled for store billing?

(Blackboard Rmit, week 8)

Crisis Management A crisis can arise from any number of events that may affect the corporation. With the rising of internet, especially social media like Facebook or Instagram, employees, consumers and stakeholders can distribute information, both accurate and inaccurate, in virtual real time. Companies are now forced to respond to a crisis far sooner than they used to. Instead of a few focused journalists to deal with, companies now have to deal with millions of “journalists� through social media. As a result, effective crisis management should be driven. (About.hm.com, n.d)

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Crisis Management of Fashion Brands H&M with the collapse of Rana Plaza (Good management)

News of the accidents were on the headlines for many days, and brands contracting with factories in Bangladesh faced many protests as consumers wanted to know their response to the disasters.

As one of Bangladesh’s biggest buyers of apparel, H&M, along with Zara, C&A, Tesco and Primark, signed a binding accord to improve conditions for factory workers to avoid fires, building collapses and other preventable accidents. H&M also participated in many interviews to promote their efforts towards correcting the Rana Plaza factory collapse. This PR approach is an opportunity to grow the trust and convey the brand’s values.

Consequently, H&M releases a continual stream of detailed sustainability reports, and case studies, which helps saying that the company is dedicated to fixing the problem. This is an effective approach to help prove that the brand is doing long-term plans, not one-off PR stunts.

(Honigman, 2013)

Gabbanna (Bad example)

Domenico Dolce and Stefano Gabbana’s (D&G) comments in an interview that in vitro fertilization (IVF) is “unnatural” and produces “synthetic children”. Many criticized their shortsightedness, in which celebrities including Elton John, Madonna, the Beckhams, etc. did a boycott of the designer brand by trending #BoycottDolceGabbana hashtag. (Mutant Communication, 2015)

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However, the way Dolce Gabbanna defensed themselves after Elton John led the boycott by go on Instagram and hashtag #boycotteltonjohn was certainly not a smart move. Although their efforts to make a point about free speech received considerable support, their response was unnecessary. It is easy to forget the virality of social media, and these public spats only provide an opportunity to spawn more undesirable news. (Cummins, 2015)

Research & Development Definition

The fashion market is characterized by rapid changes, therefore the flexibility to react to forces outside the company will decide its success or failure. These forces can be consumer demand, industry changes, new design innovations from other firms, and supply chain constraints. Research and development (R&D) process investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures. (Bandinelli, Rinaldi, Rossi & Terzi, 2013)

“Mobile Boutique� - A Unique Retail Operation +Pros: - Low overhead cost - Easy access to customers - Flexibility schedule - Give the business a creative edge +Cons: Small retail spaces Limited inventory

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Reference List 1. About.hm.com n.d, ‘H&M releases its twelth sustain ability report', About.hm.com, viewed 4 August 2016, <http://about.hm.com/en/news/newsroom/news.html/en/hm-releases-its-twelth-sustainability-report.html>.

2. Aviva.co.uk n.d, ‘Why do you need insurance ?’, Aviva, viewed 4 August 2016, <http://www.aviva.co.uk/yourbusiness/helping-you-do-business/why-do-you-need-insurance.html>.

3. Bandinelli,R,Rinaldi,R, Rossi,M,Terzi,S 2013, ‘New Product Development in the Fashion Industry: An Empirical Investigation of Italian Firms’, Intech Open , posted 15 July, viewed 4 August 2016, <http://cdn.intechopen.com/pdfs-wm/45559.pdf>.

4. Wikipedia.org n.d, ‘Credit Management', Wikipedia, viewed 4 August 2016, <https://en.wikipedia.org/wiki/Credit_manager>.

5. Businessdictionary.com n.d, ‘Productivity', Business Dictionary, viewed 4 August 2016, <http://www.businessdictionary.com/definition/productivity.html>.

6. Clothingsecurity.net 2010, ‘Security tags on clothes and the benefits and other efforts to stop shoplifting’, Clothing Security, posted 17 December , viewed 4 August 2016, <http://www.clothingsecurity.net/security-tags-on-clothes-and-the-benefits-and-other-efforts-to-stop-shoplifting.html>.

7. Cummins, P 2015, ‘Dolce and gabbana PR Crisis’, Clearlypr.co.uk, posted 18 March, viewed 4 August 2016,<http://www.clearlypr.co.uk/dolce-and-gabbana-pr-crisis/>.

8. Dhoul, T 2014, ‘What is the operation management ?’, Tompa, published 30 April, viewed 4 August 2016, <http://www.topmba.com/mba-programs/what-operations-management>.

10. Fairchild, J 2013, ‘Retail shrinkage control loss prevention store’, Linkedin.com, viewed 4 August 2016, <https://www.linkedin.com/pulse/retail-shrinkage-control-loss-prevention-store-vahid-hamzabegovic>.

11. Fashion & Textile 2014, ‘Global Connect Part 4, Youtube.com, posted 24 March, viewed 4 August 2016, <https://www.youtube.com/channel/UCeI4R-uB7iA-JjvUZzbNftQ>.

12. Honigman, B 2013, ‘Reacting to tragedy and bad PR through digital content’, Contently.com, posted 8 June , viewed 4 August 2016, <https://contently.com/strategist/2013/06/08/reacting-to-tragedy-and-bad-pr-through-digital-content/>.

13. Jason Smith 2016, ‘Cảnh giác : Tên cướp tát cô gái bất tỉnh để trộm laptop’, Youtube.com, posted 14 February, viewed 4 August 2016, <https://www.youtube.com/watch?v=Ofu--Yawtrk>.

14. Mehra, S n.d, ‘Store operations Presentation', Slideshare.net, viewed 4 August 2016, <http://www.slideshare.net/superstar23/store-operations-presentation>.

15. Mutant Communication 2015, ‘Fashion faux pas: #boycottdolcegabbana and the art of crisis management Pr’, Mutant.com, posted 18 March , viewed 4 August 2016, <http://www.mutant.com.sg/fashion-faux-pas-boycottdolcegabbana-and-the-art-of-crisis-management-pr/>.

16. Qmatic Group 2014, ‘Click and Collect: The way it should work’, Youtube.com, posted 15 June, viewed 4 August 2016, <https://www.youtube.com/watch?v=rZPYW6IPMTw>.

17. Tân Phát 2013, ‘Cổng từ an ninh cho siêu thị, cửa hàng tự chọn’, Youtube.com, posted 10 December , viewed 4 August 2016, <https://www.youtube.com/watch?v=jlwMUWN2Igg>.

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