Retail Operations is the function at the retail organization that handles opening and operating the retail stores, and delivering the customer experience to the end consumer through the physical retail outlets.
Retail Operations Structure
In the retail organization structure, operations is considered a core function, and involves the biggest team in the company.
The operations function includes:
- Retail Operations: Managing retail stores
- Warehouse Operations: Managing warehouses and distribution centers
- Ecommerce Operations: Managing & delivering online orders
At the top of the retail operations function is the Director of Retail Operations, who usually reports to the COO of the company.
Each region then gets a Retail Operations Manager, who reports to the director and manages a team of Area Managers.
Every 3 to 5 stores are grouped in an “area” or “district” under the Area or District Managers, who directly manage the Store Managers in this area.
Retail Operations Management
Retail operations management involves the following core activities:
1. Opening & Closing Retail Locations
Scouting new locations that are suitable for the business, and managing the opening projects of these locations, as part of the retailer’s expansion strategy.
The opening projects include hiring & training the retail team, sourcing equipments and supplies, merchandising the store and preparing for the opening event.
On the other side, part of of this function is to also analyze the performance of the existing retail stores, and making decisions on closing some of them, and managing the closure process till the end.
Read Also: Cannibalization
2. Recruiting & Hiring The Store Teams
Interviewing, assessing and choosing suitable candidates for the stores.
Recruiting and hiring store employees is an ongoing process at most retail businesses. This is because the business typically expands by opening new locations, as well as having team members leaving and being replaced most of the time.
Read Also: Retail Recruitment Strategy
3. Day-to-Day Management of Retail Locations
Managing the retail stores on a daily basis, through the team of store managers and their respective teams.
- Opening & closing procedures
- Receiving deliveries
- Merchandising and visual display
- Customer service and after sales
- Team scheduling
- Team management and development
4. Ensuring Compliance of The Retail Stores With The SOP
It is essential to make sure that all those retail stores are operating in line with the company’s standards and guidelines.
This is done by implementing regular checks at store level, to ensure compliance and adherence to the policy, which is then inspected by the retail audit team on quarterly or semi-annual basis.
Download the store operations workbook of printable excel checklists, used on a daily basis to ensure compliance at retail stores from members area.
5. Inventory Management
Inventory management is a broad process that involves many functions at the retail organization, and this includes the store teams.
For their part, the stores need to implement the right processes of receiving and handling inventory, and try their best to minimize shrinkage at store level.
Read also our Inventory Management Guide
6. Sales Management as Part of Retail Operations
While at many companies sales can be separate from operations, here they are part of the same function.
Important part of this function involves managing the sales process on a daily basis, by reading and analyzing retail reports and actioning on them, as well as training and managing the sales team on the floor.
Read Also: Types of Sales Reports
The store teams are also responsible for delivering the customer experience by implementing good customer service and handling returns and customer complaints.
This is why a sizable part of this team’s compensation is linked to sales and customer experience, in the form of bonus or incentives that are triggered upon delivering on pre-set KPIs.
7. Delivering Financial Goals
Finally, Retail Operations Managers are responsible for delivering on the financial goals of their assigned retail locations.
This includes managing P&L, delivering sales targets and KPIs, and delivering on inventory targets such as shrinkage.
Retail Operations Resources
Check out the in-depth Retail Operations Management Course and learn how to manage retail stores through your teams. Learn how to divide responsibilities and measure performance.
You’ll also learn how to budget and manage sales, in the Sales Management, and Retail Budgeting Courses included in the program, by knowing how to read sales reports and take actions based on them.
In addition to sales and operations, in the program, you’ll also learn how to analyze and manage P&L for your stores, to correct and optimize their performance
Retailer & Founder of Retail Dogma, Inc.
Rasha has 14 years of retail & ecommerce experience. She has started an ecommerce business in 2008, and later worked at H&M, Bath & Body Works, Victoria’s Secret and Landmark Group. She’s lived in 4 different countries, speaks 3 different languages and holds a BSc in Pharmaceutical Sciences and an MBA in Strategic Management & Marketing.