Application
This unit describes the performance outcomes, skills and knowledge required to access organisational information and conduct research to understand the fundamentals of retail financials and operations.
This unit applies to individuals working in a diverse range of retail sectors and business contexts.
No occupational licensing, certification or specific legislative requirements apply to this unit at the time of publication.
Elements and Performance Criteria
ELEMENTS | PERFORMANCECRITERIA |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Determine the commercial structure of a retail business. | 1.1. Access and review a retail business strategy to determine organisational direction and priorities. 1.2. Access and review a retail organisational structure and determine the roles and responsibilities of key retail functions. 1.3. Identify internal and external factors impacting retail performance. 1.4. Access and interpret a retail profit and loss statement to identify key financial metrics and budgeting considerations. 1.5. Review key internal and external factors impacting on retail performance. |
2. Research retail leasing arrangements. | 2.1. Research the rental costs and terms of a retail lease. 2.2. Identify costs, initial and ongoing, of establishing a retail space. 2.3. Calculate the profit required to cover the cost of establishing a retail space. 2.4. Calculate the breakeven point in terms of the lease duration. 2.5. Identify value of stock held within a store and calculate the sales turnover per square metre to determine store productivity. |
3. Review retail inventory processes and structures. | 3.1. Access and review a retail merchandise strategy to determine organisational merchandise objectives. 3.2. Identify key financial metrics considered in merchandise management. 3.3. Review organisational structure of categories, sub-categories and product ranges. 3.4. Review organisational processes for inventory purchasing and management. 3.5. Identify internal and external factors impacting product performance. 3.6. Perform basic retail calculations to determine the difference between product cost and retail price to calculate a margin. |
4. Research the retail customer. | 4.1. Review organisational target market and target market profit. 4.2. Identify strategies to engage the target market and opportunities to enhance customer experience. 4.3. Identify the role and value of customer service teams in engaging the retail customer. |
Evidence of Performance
Evidence of the ability to complete tasks outlined in elements and performance criteria of this unit in the context of the job role, and:
review a retail business's strategy, structure and profitability to determine:
business objectives
breakeven point and profitability
internal and external factors impacting on performance
identify costs of establishing a new retail store, including:
store design
fitout
stock
legal and accounting
security
point of sale equipment
bank guarantee
recruitment and training
marketing
review the following retail merchandise performance and document a report on merchandise performance:
profit margins
sell-through rates
inventory stock holding
sales per square metre
research the target market of a retail organisation and document strategies to engage the target customer.
Evidence of Knowledge
Demonstrated knowledge required to complete the tasks outlined in elements and performance criteria of this unit:
role of a retail strategy and common retail objectives
role of a merchandise strategy and common merchandise objectives
retail profit and loss statements:
role
key metrics:
sales
gross profit
net profit
cost of goods sold
expenses:
fixed
variable
key commercial elements of a retail business strategy:
sales turnover
profit
investment in inventory
investment in retail space
common retail organisational structures and roles and responsibilities of key functions:
operations
marketing
warehousing
stores
buying
planning
visual merchandising
common costs and considerations associated with establishment of a retail space:
leasing costs
bank guarantee
design costs
fit-out costs
utilities
stock
equipment
recruitment
staff training
marketing
legal
leasing agreements and terms
key internal and external factors impacting retail productivity and performance
value of retail product at cost and retail
organisational merchandise structure:
categories
sub-categories
ranges
key retail financial metrics considered in merchandise management:
sales
gross profit
sell-through
rate of sale
average sale price
unit sales
markdown percentage
sales plan
principles of inventory management and performance
key considerations in managing physical retail environments:
sales targets
store presentation standards
service standards
stock holding
promotion strategies
team structure.
Assessment Conditions
Skills must be demonstrated in a service industries environment. This can be:
an industry workplace
a simulated industry environment.
Assessment must ensure access to:
relevant documentation:
retail organisational strategy
retail profit and loss statement
retail merchandise strategy
retail merchandise performance data.
Assessors must satisfy the Standards for Registered Training Organisations’ requirements for assessors.
Foundation Skills
Foundation skills essential to performance are explicit in the performance criteria of this unit of competency.
Sectors
Cross-Sector
Competency Field
Working in Industry