Management of inventory at the store is a key focus area for all retailers. There is an increasing evidence of a partnership between the operations and finance functions with both process and policy being tuned to inventory management. Perpetual stock takes are outsourced to specialist firms by an increasing number of retailers who seem to have reaped significant benefits from this move. Retailers are also looking at decreasing shrinkage levels by focusing on process, policy and technology initiatives. Visual merchandising (VM) viewed as additional revenue driver. It is being viewed as a function that should drive sales rather than just enhancing the ‘look’ of the store. To this end, some retailers are starting to correlate the performance of specific VM displays with the sales of the respective categories. It is interesting to note that
value retailers had a significantly higher process maturity than their department store and fashion counterparts. Space management tools are slow to take off for large format lifestyle retailers, space efficiency assumes great importance, and, given the high real estate cost, slight deviations can significantly affect revenues.