Product Hierarchy in Retail Industry

The retail industry which has greatly emerged in last few decades, has undergone certain transformations with changes in tastes, preferences and shopping behavior of consumers. With the advent of technology, the more advanced online retailing has also gained considerable prominence. But, in this regard it must be noted that the product hierarchy in retail industry involves segregation of the products into stock keeping units on the basis of product categories and segments.

These classifications may be based on the basis of gender, department or sub department, commodity or sub commodity as decided by the strategic unit of the retail chain especially in respect of modern trade.

The product hierarchy in retail industry also looks into activities of transportation of products and inventory management depending on their respective product portfolio or line of business. Some retailers may be merchandizing only lifestyle products like apparels whereas some may be merchandizing products of personal care and staples, etc. These roles and responsibilities are clearly distributed among certain hierarchies as follows:

Product Hierarchy in Retail Industry

I. The Top/Senior/Strategic Level

This level is involved in taking strategic decisions as to the products they would be offering according to the company’s line of businesses. They also decide upon the target markets and location of the stores that would help them in meeting customer needs profitably. The profiles in this level are as follows:

  • CEO/Chairman/President
  • CMO or Chief Marketing Officer
  • CFO or Chief Financial Officer
  • Head/Country Head, HR
  • Sales Head
  • Brand Head
  • Head, Advertising and PR

This level, in line with the company’s chain of operations decides upon the SKUs of the products to be sold and assigns targets to the subsequent hierarchical level.

II. The Managerial Level

This level communicates the targets assigned and allocates the same optimally to the retail outlets. They also decide upon the strategies of order batching and inventorying of the products to be merchandized and engage in team handling for better business growth. The titles include:

  • Zonal/Regional Business Manager
  • Brand Executive
  • Manager, HR
  • Store Manager
  • Area Sales Manager
  • Logistics In-Charge
  • Merchandiser

 III.  The Executive/Entry Level

The employees under this hierarchy are frontline executives who actually interact with and handle customers and close sales. They are engaged in establishing better relationship with customers by assisting them while they make a purchase decision and handle their complaints, if any. The job titles under this hierarchy are:

  • Customer Care Associate/Executive
  • Counter Sales Executive
  • Stock In-Charge
  • Assistant Merchandiser
  • Sales Associate/Executive/Trainee

So, in a nutshell, the product hierarchy in retail industry involves ensuring proper communication of the right products in the right quantity along with customer assistance to the end consumer and providing them a favorable shopping experience.

The product hierarchy in retail industry carries out the activities of delivering the right product basket to the end consumers profitably along with pre and post sale assistance.