2.14. Fashion Retail Organisations — Overview of Retailing

Organisational Structure includes a clear understanding of the authority and responsibility for each job to be done. Organisational system differs with the difference in type of merchandise, size of retail firm and target customer.

The organizational structure in fashion retail refers to how roles and responsibilities are defined and delegated within retail businesses. It is important because it clarifies who is responsible for what tasks, which can help streamline operations and improve efficiency. The structure can vary based on factors such as the type of products the business sells (e.g., clothing or accessories), the size of the retail firm (small independent stores vs. large chains), and the particular preferences or needs of the target customer demographic.

Think of the organizational structure like a sports team. Each player has a specific position and role to fulfill during a game. Just like a team needs coordination to succeed, a retail organization requires everyone to understand their roles to provide the best service and products to customers.

Fashion Retail Businesses consist of Small Single-Unit Stores, Department Stores, and Chain Stores.

• Small Single-Unit Store: A neighbourhood store. These are owner and family operated single stores.
• Department Stores: Include separate sections known as departments, such as clothing, sporting goods, automotive supplies, health and beauty products and electronics equipment. Some department stores may also sell food products.
• Chain Stores: Retail outlets that share a brand and central management, and usually have standardised business methods and practices.

In the fashion retail landscape, the business models can be categorized into three primary types. Small single-unit stores are often family-owned and serve local neighborhoods, providing a personal touch to customer service. Department stores are larger entities that offer a variety of goods under one roof, enhancing customer convenience. Chain stores, on the other hand, are branches of a larger retail brand, ensuring consistency in branding and shopping experience across locations, often benefiting from economies of scale in their operations.

Imagine going into a small local bakery – that’s like the small single-unit store where the owner might know you by name. In contrast, a department store is like a large shopping mall where you can find everything from clothes to electronics all in one place. A chain store is akin to finding the same coffee shop brand in different cities – it offers familiarity and reliability wherever you go.

• Merchandising Division: buying, merchandise planning and control, selling, fashion coordination.
• Sales and Promotion Division: advertising, visual merchandising, special events, publicity and public relations.
• Finance and Control Division: credit, account payable and inventory control.
• Operational Division: maintenance of facilities, stores and merchandise protection, personnel, customer service and receiving and marking of merchandise.
• Personnel and Branch Store Division: may function separately if the store operations are very large.

Fashion retail organizations typically have various divisions, each focusing on specific functions necessary for the retail operation. The merchandising division is responsible for product selection and planning to meet customer demands. The sales and promotion division handles all marketing activities to attract customers. Finance and control manage the financial aspects, including budget management and accounting practices. The operational division ensures that everything runs smoothly at the store level, from maintaining the premises to managing staff and customer services.

Think of a retail organization as a well-coordinated orchestra. The merchandising division is like the string section setting the melody (product variety), while the sales and promotion division serves as the brass section providing powerful bursts of sound to catch attention (advertising). Finance acts as the percussion, keeping the rhythm steady, and operations are the conductor making sure all parts work harmoniously together.

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