Now, no more free plastic carry bags

Consumers are all set to lose the luxury of getting a free plastic carry bag from shopkeepers after buying grocery or green vegetables. They will have to shell out extra money from their pocket for the plastic carry bag.

The Central government on Monday notified the plastic waste (management and handling) rules, 2011, that stipulated “no carry bags shall be made available free of cost to consumers.” The cost of individual carry bag, however, would be deduced by the local municipality.

The new rules, devised by the Union Environment Ministry with the intention of getting rid of plastics chocking drains and water-bodies, will replace the recycled plastics manufacture and usage rules, 1999, which was amended four years later.

Besides discouraging the consumers, the new rule bans using plastic materials in sachets for storing, packing or selling gutkha, tobacco and pan masala. Municipal authorities have been advised to constructively engage rag-pickers to isolate plastic waste from garbage.

Foodstuffs, too, will not be allowed to be packed in recycled plastics or compostable plastics as per the new law. “It is impractical and undesirable to impose a blanket ban on the use of plastic all over the country. The real challenge is to improve municipal solid waste management systems,” said Union Minister Jairam Ramesh.

Plastic bags shall either be white or can be made only with those pigments and colours, approved in the Bureau of Indian Standards. The bags should not be less than 40 microns in thickness whereas under the earlier rules, the minimum thickness was 20 microns. With several states allowing plastic bags of various minimum thickness, it is now expected that 40 microns norms will become the uniform standard to be followed across the country.

Source: DECCAN HERALD, New Delhi.

Cost effective option in POS: A lot can be saved at POS.

Due to recession many retailers are concentrating on cost-cutting measure business are looking for saving every bucks and Open source Point of Sale applications are getting first choice. The development of Linux is one of the most prominent examples of free and open source software collaboration; typically all the underlying source code can be used, freely modified, and redistributed, both commercially and non-commercially, by anyone under licenses such as the GNU General Public License. Typically Linux is packaged in a format known as a Linux distribution for desktop and server use. Some popular mainstream Linux distributions include Debian (and its derivatives such as Ubuntu), Fedora and openSUSE. Linux distributions include the Linux kernel, supporting utilities and libraries and usually a large amount of application software to fulfill the distribution's intended use. Some of the POS systems used in Linux platform are Lemon POS, Tux Point of Sale.

In the same run Future Group India’s largest retailer has implemented the Beetle/iSprint PoS system, as well as its TPLinux in-store open source retail software. The group has already trialled both products at its Big Bazaar hypermarket chain, and said it will now install 6,000 TPLinux licenses and POS systems across other chains such as Pantaloons, Central, eZone, and Food Bazaar for this they has selected Wincor Nixdorf's retail store software and Point-of-Sale (PoS) systems, and will roll out the same across all its formats. The group said that in the pilot, the new systems had helped reduce check-out times by 75%, and overall costs by 65%.

Importance Of Operation Parameters.........Need for calculation.

SITUATION	BASKET SIZE	TICKET SIZE	NET SALE	FOOTFALL	CONVERSION	PRODUCT
1	High	High	High	Ok	Ok	Ok
2	High	High	Low	Low	Low	Good
3	High	Low	Low	Ok	Ok	Good
4	Low	High	High	Ok	Ok	Good
5	Low	Low	Low	Ok	Ok	Bad
6	Low	Low	High	High	High	Good
7	Low	High	Low	Low	Low	Good

Conclusion for the above situations as under:

(1) Sale is high thus no need to worry. Check on Footfall, Conversion, Product improvement will raise the  business to next level.

(2) Reason is Low FF/CONV.

(3) Only low value items selling.

(4) High value items selling.

(5) Product problem.

(6) Only due to High FF/CONV.

(7) High value items selling. But Low FF/CONV.

Low and High here means the degree of variations from Average. There are various interpretations could be made from this parameters here I just want to show the importance of calculation of Ticket Size & Basket Size.

Even if we take the combination to more variables with Footfall & Conversion then it will give more picture of the health of a Retail Store.

Buyer & Merchandiser Some Calculations

A fashion buyer needs to be versatile and flexible as the buying schedule may include sitting behind a desk one day writing reports and communicating by phone or email, traveling to identify forthcoming trends.

Liaising with suppliers:-

Buyers liaise with garment suppliers on a regular, often daily, basis. A buyer may spend more time speaking to a representative from one of the company’s manufacturers, probably from the design or sales department, than to another buyer from the same office. It is important therefore to establish strong working relationships with suppliers as a mutually supportive approach will be beneficial to both parties.

Negotiation:-

One of the major aspects of the buyer’s role in dealing with suppliers is to negotiate prices and delivery dates, garment manufacturer’s sales executive, or occasionally the senior designer, submits a ‘cost price’ for a garment, which has been based on the result of a costing process in the factory This may take place in a face-to-face discussion, or in writing. The buyer calculates how much the garment needs to be sold for in the store to achieve the retailer’s ‘mark-up’, which is the difference between the manufacturer’s cost price and the selling price. The cost price is usually multiplied by around 2.5 to calculate the retail selling price for a retailer of branded goods, or three times the cost price for an own label retailer, including Value Added Tax (VAT) in appear from these mark-ups that retailers make a great deal of profit, but their slice of the selling price has to be substantial in order to cover overheads such as store rents, utility bills, shop assistants’ wages and head office costs, including the buyer’s salary, and  it is hoped some net profit for the company.

Buyers should be able to estimate from past experience how much the consumer will expect to pay for a particular garment, and therefore can calculate the optimum cost price which they would be prepared to pay. Initially the supplier approaches the price from a different angle from that of the buyer, working on how much the garment will cost the supplier to produce. An experienced salesperson working for a manufacturer is also able to anticipate how much the buyer expects to pay. The buyer obviously wants to pay as little as possible for the product whereas the salesperson wants to sell it for as much as possible, since both are aiming to make profits for their respective companies. The buyer and salesperson both need to be realistic, however, and use their judgment as to which prices are reasonable. If the buyer cannot achieve the retailer’s target margin the buying manager will probably need to give permission for the garment to be purchased at this price, otherwise the style may be dropped from the range.

A good merchandising should start with some correct things as:-

·        Correct Product

·        Correct Price

·        Correct Place

·        Correct Assortment/Mix

·        Correct Time

·        Correct Quantity

·        Correct Quality

Now, the question is how to do so much correct things perfectly. First step is to analyze the correct merchandise hierarchy. It is nothing but the grouping at different levels. It gives the fair idea about the store’s stock mix. Then, a small visit to stores to check out real stock situation because many a time your software won’t reveal the reality, though it is very difficult to do every time and too if the chain of stores are too big. A close coordination with the buying & merchandising team is very important. The advertising/communication team should also be very important before proceeding into a big buying deal & merchandising plan.

Now I specifically discuss about the OTB (Open-to-Buy) plan. 

Some of the most important aspects of OTB plan are:

Sales Forecast- A sales plan should be there before hand on weekly basis for the entire year. It helps in to react to the variations in sales where one could reschedule deliveries & alter the order accordingly.

Forward Cover- It is the cover maintained on the basis of stock turn. Say if the stock turn is four times a year then the stock holding will be taken equal to three months stock cover.

Stock required- If it is first month then stock required will be sum of forecast sales of 2nd, 3^rd & 4^th month by taking forward cover of 3 months.

Opening Stock- It is an estimate for first month & onwards the closing stock of previous month will be the opening stock of the current month.

Intake requirement- It is the difference between required stock & opening stock.

On order- Stock for which the purchase order already raised but due for delivery.

Open to receive- It is the difference between stock on order & intake requirement.

Closing stock- It is calculated by opening stock subtract sales & add on-order & open-to-receive.

There are some methods through which one could get control on its inventory plan in absence of  ERP software or technology:

Basic Stock Method: Basic Stock Method will be arrived by deducting average monthly sales for the period from the average stock for that period.

Now, average monthly sales for the period by number of months considered in the period. And, average stock for the period could be arrived by division of total planned sales for the period by estimated stock turn rate for the period. Opening stock is arrived by adding planned monthly sales and Basic stock.

Percentage Variation Method: If the stock turns ratio will be more than 6 times and more than percentage variation Method may be used. Where opening stock will be arrived from multiplying average stock for the period with planned sales for the months divided by average monthly sales and then divided it by two.

Now, if you need to plan it weekly than first you have to calculate number of weeks to be stocked it will be arrived by dividing by number in weeks in the period by stock turn rate. Then, average weekly sales must be calculated by dividing estimated total sales for the period by the number of weeks in the period. Now, opening stock will be arrived by multiplying average weekly sales with number of weeks to be stocked.

Sales Ratio Method: Another method is sales ratio method whose first you have to calculate the stock sales ratio which will be arrived by dividing value of stock by actual sales the opening stock will arrive by multiplying stock sales ratio with planned sales.

Rural Retail Market in India: A new avenue.

India is also said to be a nation of shopkeepers. India has one of the highest densities of retail shops with over 12 million outlets and approximate 90 per person.  The population of India now stands at 1.21 Billion where as the rural share is around 70% of it with more than 5 Lac villages.

The rural population has also caught the eye of retailers looking for new area to explore. The TATA’s & ITC are set to storms the rural areas of the country as they realize the huge potential of the virgin rural market. ITC launched the first rural mall in the name of “Chaupal Sagar” offering diverse mix of products range from FMCG to electronics, automobile to provide farmer’s with one-stop destination to their need. Godrej and DCM Shriram consolidated are also launching one-stop shop for farmers & their communities. Godrej Agrovet is planning to set-up chain of stores in the name of “Aadhar Stores”. DCM Shriram planning to set up rural/semi-urban utility mart in the name of “Hariyali Kisaan Bazaar” chain of stores.

Thus, from the above story it is very clear that the rural market is no longer a non-player in retail game. It is now accounting for over one-third of the market for most durable & non-durable products. Even manufacturers are developing new products with the rural consumer in mind besides using village oriented marketing strategies for brand awareness. If the Shchin Tendulkar wowing village boys with a soft drink, shows that rural market is no longer of hypothetical empirical value but is well researched one as top company honchos know where to put their money & how. But, to capitalize on the opportunity a player need to be aggressive in it’s outlook and build scale quickly.