In this presentation, we will help you understand about retail location selection, factors affecting location of retail outlet, retail organization designs/structures, knowing potential customers in detail, accessibility factors, competitor’s issues, cost factors etc. We will also talk about managing human resource, effective HRM, employee productivity, importance of human resource management, motivating and developing employee’s skills, merchandise management, store management, operations management, strategic management, co-ordination of stores, emerging trends in retail, building HR scoreboard, employee behavior and organization benefits. To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html

1. Chapter 2
Location Selection and Human Resource
Management

2. Learning Objectives
Factors affecting the location of retail
outlet
Retail location research and techniques
Importance of human resource
management
Retail organization designs and
structures

3. Learning Objectives
Developing employee’s skills &
commitment and
Motivating employees

4. Factors in The Location of
Retail Outlet
Search for good Location site
Assessment of the viability of the site
Assessment of other Micro Factors

5. Details of Actual /Potential
Customers
Numbers by demographics
Earnings through income/employment
by occupation, industry, trends,
purchasing power
Pattern of spending
Demography in terms of population
growth , density and trends
Life style trends

6. Accessibility factors
Visibility of site
Pedestrian flows
Blspontaneouslyarriers in the from of
railway tracks, rivers etc
Type of location zone
Infrastructure such as road conditions
and network link
Parking facilities

7. Competitors’ issues
Amount and level of competition
Number of competitors and types of
competition
Saturation index
Proximity to competitors, traders,
market and brand leaders

8. Cost factors
Building costs
Rental costs
Rates payable
Delivery costs
Insurance costs
Rates of labor

9. Retail Location Research and
Techniques
David Huff’s Model and Centre of
Gravity Simulation
Computerized Simulation Models
Trade Area Analysis
Multiple regression method

10. David Huff’s Model and Centre
of Gravity Simulation
This method is suitable for taking
decision related to locating a single
warehouse or retail site
Above method is based on Newton’s
Law of Gravity

11. Center of Gravity Model

12. Huff’s Model- Formula
Pij = Sj÷Tijb
n ∑ Sj ÷Tijb
j=1
Where,
Pij = Probability of a customer at a given point of origin
‘I’ will travel to a particular shopping centre j
Sj = Size of the shopping centre j
Tij =Travel time taken from customer’s starting point to
the shopping centre
B= An exponent to Tij reflecting the effect of travel
time on different kinds of shopping trips

13. Evaluation of Huff’s Model
Model can be used by retailers to define
their trade areas and forecast sales
Its is best suited when the number of
stores with obtainable data are small
It takes into consideration the ‘ issues
of competition and customers’ distance
time to the shopping store

14. Limitations of Huff’s Model
Suitable in situations involving a single
warehouse
This model is not designed to cope up
with the difficulties involved in
determining how many warehouses
should be used and where they should
be lactated in distribution system

15. Computerized Simulation
Models
To overcome the problem of identifying the
locations of multiple warehouses, a computer
simulation approach will be required.
Only a computer simulation approach can be
used to process the large amounts of data for
each of the many possible configurations of
numbers and locations of warehouses

16. Trade Area Analysis
Analyzing the addresses of credit card holders
Shopping centre intercept survey
Trade are data can be used by retailers in
order to communicate or create mailing lists,
evaluate a store’s market positioning,
measuring competitive customer bases,
identifying the market potential etc.

17. The Analog Approach -Steps
A. Define the current trade are by using
the customer spotting technique
B. Matching the characteristics of the
current store with potential new store
location to determine the best retail
site

18. The Analog Approach –
Limitations
Not always each to find analogous
situations
The weaker the analogy, the more
tough will be the location decision
The approach cab be used by a retailer
having fewer number of outlets

19. Multiple Regression Method
1. Select appropriate measures of store
performance such as per capital sales
or market share
2. Select a set of potential and prediction
variables
3. Solve the regression equation and use
it to project performance for future
sites

20. Multiple Regression Method
y = a =b1x1 +
b2x2+…….+bmxm+bm+1Xm+1+….bnxn
Where, y= store sales
X’s = independent variables concerned
with the characteristic of each store and
characteristics of the trade area
(population and competition)

22. Meaning of Human Resource
“the total knowledge, skills, creative
abilities, talents and aptitudes of an
organization’s workforce, as well as the
value, attitudes and beliefs of the
individual involved.”

23. Meaning of Human Resource
Management
“the planning, organizing, directing and
controlling functions for the purpose of
employing , developing and
compensating human resources leading
to the creation and development of
human relations within the organization
with the intention to contribute
proportionately to the individual,
organizational and social goods.”

24. Competitive advantage
through effective HRM
Cost advantages
Increased motivation and effort
Good customer service
High job satisfaction less employee
turnover

25. Employee Productivity
E.P. = Retailer’s Sales or Profit
Total no. of employees
Employee Turnover
can be expressed at the rate of change in
the employers of retailing firm during a
definite period

26. Merchandise Management
Buying merchandise
Control merchandise
Pricing merchandise

27. Store Management
Recruit, select and train store personnel
Maintain stores, locate and display
merchandise
Repair and alter merchandise
Take physical inventory
Prevent inventory shrinkages

28. Operations Management
Carry out promotion activities
Managing human resources
Distribution of merchandise
Financial control technique

29. Strategic Management
Develop retail strategy
Identify the target market and workout
retail format
Identify location site
Design suitable organization structure

30. Retail Organization Structure
Determine the tasks to be performed
by the retailing firm
1. Strategic management
2. merchandise management
3. Store management
4. Operations management

31. Considerations of Organization
Design
Focus on specialization
Matching authority and responsibility
Work out the reporting relationships
Match organization structure to retail
strategy

32. Specific Organization Design
Issues
The extent or degree to which the
decision making is to be centralized
Approaches used to co-ordinate
merchandise and store management
activities when they are divided into
different organizations within the firm

33. Benefits of Centralized
decision making
Reduction in cost
Company achieves lower prices from
suppliers
Best people to make decision for the
entire team
Use of standard policies and guidelines
across stores

34. Limitation of Centralized
Decision Making
Difficult for retailer to adopt local
market conditions
Slow response to local competition and
labor markets

35. Co-ordination of Stores and
Merchandise Management
1. Increase buyers contact with customers
2. Increase customer contact and
communication
3. Involve employee to be responsible and
assign the job of coordinating buying and
selling activities
4. Improve coordination between by buying
and selling activities

36. Motivation
“Motivation cab be defined as an
unsatisfied need which creates a state
of tension or disequilibrium, causing the
individual to move in a goal directed
pattern towards restoring a state of
equilibrium by satisfying the need.”

37. Organization Culture
A set of values, traditions and customs
in the form of unwritten guidelines
which are passed on by older
employees to newer ones
values such as quality, customer
orientation, commitment, discipline,
integrity, learning, transparency,
respect, customer orientation etc.

38. Firms’ Policy and Supervision
Written policies clearly indicating what
employees have to do and also have
supervisors enforce these policies
E.G. Most of the retailer have a written
policy clearly specifying that good once
sold cannot be return or exchanged and
circumstance when such goods could be
taken back by the retailer

39. Developing Employee Skill and
Commitment
Develops employee skill through
selection and training
Empowering employees
Developing partnering relationships with
employees

40. Emerging Trends in Retail
HRM
Diverse workforce
Cultural awareness
Interpersonal skills
Support group
Technology to replace time consuming
monotonous job

41. Building the HR Scoreboard
1. Clearly articulate the business strategy
2. Build on the strategy map
3. Link HR strategy map to the overall
corporate strategy

42. Employee Behavior and
Organization Benefits

43. Summary
The factors which affect the location decision
making process are search for good location
site, access the viability of site and micro
factors such as pedestrian flows etc.
The various retail location research
techniques include David Huff’s Centre of
Gravity Simulation, Computerized simulation
model, Multiple regression method etc.

44. Summary
The strategic objective of HRM is to
match the capabilities and behaviors of
employees with the goals of the
retailing firm
Usage of HR scorecard can help HR
professionals and the retailing firm to
translate corporate strategy and
execute it by creating HR initiatives and
systems

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