“Sale, Discount Offer, Best Buy”: I can’t wait every time.

                                                                                               

It is midnight. I kept my new watch in watch case and kept staring at it for half an hour. I am addicted to get best things in low prices but now I am getting amazed why did I buy this watch which is a few times expensive than ordinary ones. It is difficult to sleep with this thought about my buying behavior being changed continuously with time. This is not in particular about me but this is related to the buying behavior of the end consumers. A customer might be addicted to low prices but an end consumer never bargains for his likelihood. I remember my childhood when I went out to nearest stationary, grocery etc and bought what I wanted without even getting confused at all, about the products. Now, my shopping destination is Carrefour, Big Bazaar etc.  As time pass by, I become price conscious like other buyers. This sensitivity about the price consciousness is driven by the sellers. I never learnt it on my own. I find out that I am being trained to become price conscious. If you closely look at the marketing materials which are used these days, every piece is designed with a price effect in it. Low price strategy is cool vodka shot which is used by sellers to mellow out sales.

A simple question to be answered is that why these days sellers are adopting low price strategies. A lot of insight and creativity is required to be the most well stocked, nicely priced and easily accessible convenient retail store. However, thinking about being another next best price retail store might not worth all times. Let us find some reason why this strategy is the best choice of any retailer in present business world---

v  Success stories of Wal-Mart, Carrefour and IKEA etc.

In the history of business and commerce, there is only one leader and rest is followers. There is always first mover’s advantage in any game. It is the reason why these shopping destinations have become so popular and successful in short span of time. Although, there is always an end to it and with market getting saturated in a while, the margins drop down and profits become stagnant.

v  Reduction/Increment of Purchasing Power.

I am confused which way to put it. But in both the cases, the idea is to save money or buy/consume more. Hence, it results in purchase of lower priced products. A retailer must give a logical and emotional reason of why it is the best price to buy its product? And off course which items are those which only its store can serve the best?

v  Generation of Bulk/Volume Sales or sales maximization.

From a retailer point of view, more sales results in more satisfaction at all levels including its sales force and entire organization. However, the performance will be eventually at risk when same product offerings or substitutes will be available next door.

v  Building trust and confidence.

Pricing must be done to reflect the value and promise which sellers make to their buyers. If we offer our price too low in relation to the value, we lose buyer’s trust and vice versa. Prices that reflects the value provided, enhances customer’s trust in product’s offerings.

v  Competitive environment of business.

Every new competitor who enters into a market uses all sorts of promotional techniques to reach maximum penetration into existing market. Almost all strategies have creativity in relation to price. So the roots of competition ultimately come down to price war between competitors. If taken in a negative way, it damages the image of the product’s offerings and its value to the customers. No sooner or later, the promotional strategy to generate incremental sales will become a part of the marketing calendar. As a customer, I will be addicted to be influenced every time I visit the retail store and if not, your next door retailers are ready to welcome with warm greetings.

Get Busy in Employee Engagement

       

It makes sense to get busy with productive things rather than letting things being done on its own. An anchor can hold the stream, an action can cause repercussion, a belief can change the thought process and an idea can change your life. Everybody spend a lot of time thinking about what they have to do. Better you watch it or else it will become your action one day. Your action can become your habit and your habit will represent your personality.

As an employee, one can get confuse to decide what can be the best next step towards their career. Am I going ahead in right direction? Can I be assured of the promotion in the coming years? All these questions revolve around you when you have spent a few years time at one position. Expert opinion states that an employee should not have to leave their existing company to secure their next promotion. “It does not belong to me. I was not fit for it. I need a promotion or maybe I am capable of doing much better”. These statements should never come in one’s mind at his exit interview. Honestly speaking it happens and there are a few causes which lead to that situation. However, it can be avoided at very first moment. The management skill allows an individual to understand the needs of his employees and follow it with necessary feedback, regularly.

Let us have a look at few steps on how to get busy in Employee Engagement:

1.       Act as a visiting speaker by advising them on their curriculum and conduct assessment.

2.       Process their training and analyze workforce development need.

3.       Let them talk about their career aspirations.

4.    Take care of the burning issue on your own or bring it up immediately. Don’t wait for a formal meeting.

5.       Tell your staffs/employees about their performance.

6.       Repeat do’s and don’ts of their duties and responsibilities occasionally during an interactive session.

This applies to every manager irrespective of the size of his team. In any business environment, the tools of employee engagement remain more or less same. Once a team is deployed, it is the duty of the manager to maximize the potential by educating their team members in all aspects. Creating a work culture is the sole responsibility of the leaders where individuals contribute best of their capabilities. And No doubt it makes sense in the present business world where the motto of any existing company is to make more and more profit.

Labor Management Prophecies:

                                                             

With recent changes in the trends in retailing and heavy competitions with the widening of the product line, retailers are thinking very simplistically about the cost and potential of their workforces.

“No matter how you slice it up in the retail business, payroll is one of the most important part of overhead, and overhead is one of the most crucial things you have to fight to maintain your profit margins. That is true since the birth of retailing.” The above quote is taken from the book “Made in America” by the founder of the biggest retailer of the world Mr. Sam Walton. His prophecy has been significantly proved by the leading retailers, as we stepped into the 21^st century where changing attitude towards the people working in stores are considered as a cost to be minimized.

In large retail enterprise, retailers find it easy to ignore the details of the sales floor interactions and they opt for large scale solutions to challenge the problems of staffing. Pointing to merchandise location, Price points etc are a few of the ways that facilitates sales process. Although, every aspect of retailing plays an important role but there are areas of improvement on which banks the competitiveness of the retail firm. Labor Management is one of them.  In day to day life, we face the challenges of overstaffing or understaffing. This creates an unnecessary shift to the psychology of the managers of various stores operating under the same umbrella. The management uses today’s technology which includes data acquisition and perform various analytics to do better than the previous financial years of operations. However, the bottom line is set with the fundamental approach of either of the following ways while setting up the store staffing budget.

1.       The cost of labor must not exceed a certain percentage of the sales.

2.       The staffing budget must have a given area covered per staff in the store.

3.       Every Department within a store must have one in charge.

4.       The staffing budget must not increase previous financial year at any point of time.

5.       The staffing arrangement must follow a certain ratio to the customer traffic.

The above fundamental approaches need a modification in the light of the 21^st century retailing. To sum it up in a few lines, it needs a very clever approach towards predicting what volume of merchandise will sell in a particular period of time. The real time adjustments can be made observing the actual flow of the customers at one location. There is always a possibility to do much better than this. A few studies have shown the wisdom of this: Stores which managed adequate staffing in the light of store traffic rather than sales forecasting and sale budgeting, have achieved substantial sale increase without extra costs. Even there is an opportunity of getting better results when retailers recognize that their workforce is not just homogenous pools of labor. When these dynamic adjustments will be made, then not only retailers will decide how many but also who in particular to move to sales floor.

J (Naiyer)