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A Beginner's Guide To Store Management
Darren GilbertApr 13, 2018 11:07:42 AM10 min read

A Beginner's Guide To Store Management

While there aren’t many guarantees for retail success, if any, proper store management can help you get close. That’s because of the results you can enjoy by having close control. And the positive effect it has on your business.

What is store management [and what does it all involve]?

Understanding what store management is, is easy. It’s the practice of managing and controlling everything around and within your store - nothing more, nothing less. That said, dig a little deeper and you’ll soon realise that, while it’s easy to understand, having competent control over all the moving parts that make up your store is a complex task.

You only need to consider the multitude of roles and responsibilities of your average store manager to see that. They include looking after the wellbeing of your staff and motivating them to meet their sales targets; overseeing the ordering and receiving of goods if buying is not centralised and dealing with any necessary price changes. They also need to understand customer service and how to handle customers queries and returns. And that’s just the beginning.

Just a note on the centralised versus decentralised buying argument before we continue. Centralised buying is far more efficient than decentralised buying. That’s because by centralising your buying - having one central control point for all buying decisions instead of allowing individual stores to make decisions on their own - you can guard against range bloat. More importantly, you’ll guard against rising inventory costs.

Store managers also have sales goals they must reach to ensure your store is profitable. They need to consider how to present in-store advertising and how to implement different strategies for each of the categories they stock. They must be able to read a planogram. More than that, they’re responsible for the safety of customers and employees while on store premises.

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Of course, all of the above speaks to their responsibilities. It’s also worth exploring what would happen if a store manager doesn’t have proper control.

For one, not having proper control means your store can sit with expired or dead stock that you can’t shift, and so it becomes a burden. You would also suffer from out of stocks.

There is also the threat of inventory shrinkage, be that through customer or staff theft, stock loss due to damage at the point of receiving, or damage during transit.

Unpacking and meeting the objectives of store management

In our article on retail vendor management, we delved into the four steps you can take to build an effective and efficient vendor management process. You could also just as easily apply a similar method to maintain proper control of everything around your store.

That said, while process is crucial, it’s first worth looking at the objectives of store management and then finding ways to meet them. That’s what you’ll find below.

As a side note, the upcoming objectives are not all-encompassing but rather a cross-section of the key ones to consider.

1. Establish and maintain your supply chain

The first objective is to ensure an uninterrupted supply of stock. In short, establish a supply chain that is both secure and delivers stock on time, every time. That should be a given though. If you don’t have stock to sell, everything else falls apart.

One of the best actions to take to ensure your store has proper control of its stock would be to implement a robust ordering system, which allows you to monitor your inventory whenever you want, be that daily, weekly, or monthly.

Also known as an inventory replenishment system, DotActiv drives this by first exporting causal data - facings, capacity, minimum display quantity and so on - to a staging table. This data is then picked up and transferred to a replenishment engine. When you reach your minimum stock level, the engine kicks in and either orders more stock, or alerts your buyers to do so.

On that, it’s also worth mentioning the value that planogram software can contribute to the inventory management system. Planogram software can help you determine shelf stock capacity based on space allocations. More than that, it can aid you in deciding your days of supply, not just for each product but also whole categories. And then, if you’re following a centralised buying approach, it can to assist you to centralise your sale strategy.


Book a one-on-one consultation with us to hear how DotActiv drives inventory replenishment


That said, to meet this specific objective, you also need to manage the retailer-supplier relationship and ensure it’s always healthy.

Imagine, for example, if a customer comes into your store and wants to order 300 fitness armbands as gifts for a Year End party for his company. Far more than what you’d typically stock. If you have a good relationship with your supplier - one where you could phone them ad-hoc - you can get hold of them quickly to check availability, then speak to the retail buyer, and formulate a deal.

That won't happen if you treat your suppliers as nothing more than stock deliverers. In fact, your suppliers will start resenting you if you take them for granted and could even withhold stock if you fail to pay them. It’s been known to happen.

Of course, you can’t guarantee that your supply chain will always remain unbroken. There are some scenarios - like the truck transporting your stock is hijacked - which you can’t control. In that case, to ensure control of your stock, it’s vital to have a backup plan that can cover any setbacks.

2. Ensure the safe handling of stock to prevent damage

Once you have stock coming into your store, it’s crucial that you put a process in place to ensure the safe handling of it. Again, that should be obvious. However, that doesn’t mean that you can’t overlook it. That’s especially true if your store manager is overwhelmed by other issues.

Fortunately, there are a few measures you can take to prevent damage due to poor handling. The obvious action to take is to train all of your staff, no matter their primary role. You can even bring in product handling officers to train them. That includes arranging safety training and informing them of the standards that must be met when handling your stock.

On the other hand, you can implement stock handling measures at the receiving bay for those of your staff who work exclusively in the storeroom. Since many mistakes happen at this point, it’s crucial that signs are in place and anyone who handles the stock at this point understands the rules around storing merchandise in the stockroom.

For example, they must know how high each product should be stacked, how to store products on pallets, how to store cartons and shrink wrapped products and so on. An open and demarcated warehouse or stockroom with wide aisles can also help to improve the handling of merchandise.

That said, ensuring the safe handling of stock isn’t only about protecting your merchandise from avoidable breakages. It’s also about ensuring that there is no deliberate causing of damage. Like theft, or fire.

The obvious solution, in this case, is to install a security system, which should include either a guard, cameras and sensors, or both for theft. In most cases, a camera system would be best since it’s easy enough to evade a guard.

For fires, a hydrant is an obvious solution. However, you also need to think when placing highly flammable or hazardous products in-store and obey approved safety standards.

3. Minimise the cost of storage where possible

It costs money to store stock. That much is true and it’s accepted. However, you shouldn’t accept it to the point that you forget to monitor your storage space. That will cost you dearly. While stock is crucial to your business, it isn’t the only thing that drives it.

One way of minimising your cost is to implement an inventory system that regulates your stock. It’s the same inventory replenishment system that you’d use to bring stock in, and it will help you to guard against obsolete inventory. More importantly, it will allow you to allocate more storage space to your best selling merchandise.

Another consideration is to keep your in-store stock room to a minimum size. That’s for two reasons. Firstly, it will force you to not over order on items. Before ordering anything, an analysis would need to be done across the company and factor in all the relevant retail data to determine how much stock to send. This is where a centralised buying method works in your favour.

Secondly, and perhaps more importantly, a smaller stockroom means you’ll have more room in your store to display your stock. This is especially crucial if you sell bulky items such as TV and Home Appliances. If that’s the case, it might be better to decide to use only 20% of your available space for receiving stock and storage.

That said, you can also avoid additional costs by not giving into the temptation of taking stock offered by suppliers at a discount. As we noted in another article, it’s the very definition of irresponsible ranging and can quite often lead to your stores sitting with dog lines - the tail of your range, which takes up space without returning anything of value.

On the other hand, by reducing your supplier lead times, you can minimise the cost of storage. For example, by reducing the lead times (days of supply) from 15 to seven days, you can cut down on the amount of stock on hand while, simultaneously opening up storage space for other fast selling lines.

By allocating more space to fast selling stock and less or no storage space for slow lines, you’re putting your storeroom space to effective use. In short, you’re making your space work for you.

Of course, you should also minimise your stock holding so that your capital is freed up. Just a note of warning here: you need to balance just right so that it’s not so low that you run the risk of running out of stock.

4. Keep a systematic record of stock that arrives and leaves your store

If you want to know what sells and what doesn’t, one of the most straightforward actions to take is to set up a way to monitor it. A robust POS system can help you here. In this case, there should be a combination of both hardware and software resources.

That said, be careful about the system you choose. It must meet all of your requirements. A modern computer and cash registers with the latest operating system is an excellent choice since it should have enough capacity to process the raw data you collect into meaningful output.

It’s this retail data which is the lifeblood of your business. Let’s use an example to illustrate why we say that.

Imagine you’re a retailer who doesn’t have a process when it comes to maintaining stock levels. It essentially means there is no recording system for you to determine how much stock to order and when to order it. Instead, you rely on your gut instinct to decide when to order. While that might work for a short period, it can ultimately sink your business.

You’d only need to consider the consequences. They are same as the consequences for not meeting the other objectives of store management: out of stocks, inventory shrinkage, and dead stock. On top of that, there is the real possibility of reduced profits.


Darren Gilbert

Darren Gilbert joined in 2017 and is the content manager. He has a Bachelor of Arts in International Studies from the University of Stellenbosch.