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Strategic Retail Planning

Process

Definition

The Strategic Retail Planning Process is the set of steps


a retailer goes through to develop a strategy and plan.
It includes how the retailers select a target market,
determine the appropriate retail format, and buisl
sustainable competitive advantages.

It includes:
Defining the overall mission or purpose of the company
Deciding on objectives that management wants to
achieve
Developing a plan to achieve these objectives
The strategies will be implemented through pricing,
promotion, and physical facility plans in order to
accomplish the overall mission of the firm.

Define the business mission

The mission of the business may be defined as the


fundamental and unique purpose that sets a business
apart from other firms of its type.
It is a broad description of retailers objective and scope
of the operations in terms of product, market and
technology.

The statement should embody the following elements The basic product or the service to be offered, the primary
market or customer group to be served and the technology
to be used in production or delivery.
The fundamental concern for the survival through sustained
growth and profitability
The public image to be sought
The managerial philosophy in terms of basic philosophy,
values, aspirations and philosophical priorities
The self concept that people affiliated should have of the
firm, which may include management style and work ethics.

Conduct a Situation Audit

After developing a mission and setting the objective, the


next step in the strategic planning process is to conduct
a situation audit, an analysis of the opportunities and
threats in the retail environment and strengths and
weaknesses of the retail business relative to its
competitors.

Elements in the situation analysis Market factors- size, growth, seasonality, business cycles
Competitive factors- barriers of entry, competitive rivalry
and bargaining power of vendors
Environment factors- economic, social, technological and
regulatory
Analysis of strengths and weakness- it indicates how well
the business can seize opportunities and avoid harm from
threats in the environment. Some issues to be considered in
performing a strength and weakness analysis
Management capabilities
Financial resources
Locations
Operations
Merchandise
Store management
Customer loyalty

Identifying the strategic


opportunities

After completing the situation audit, the next step is to


identify the opportunities for increasing sales.
Growth strategies
Entry strategies

Growth strategies

The vertical axis indicates the synergies between


the retailers present retail mix and retail mix of
the growth opportunities.

The horizontal axis indicates the synergies


between the retailers present market and the
retail mix of the growth opportunity.

1. Market penetration
It targets existing market segments with existing
formats, seek a differential advantage over competition
by a strong market presence that borders on saturation.
Market penetration is often used by retailers because it
builds on the firm's existing strengths, which include
knowledge of current customers and their preferences
and the firm's familiarity with the merchandising lines.
Such a strategy is designed to increase:
(1) the number of customers
(2) the quantity purchased by customers
(3) purchase frequency.

Increase the number of customers


It is one way of increasing sales and profitability. Adding
stores and modifying in-store offerings can lead to more
customers.
The use of the retailing mix variables to ensure:
1.

The lowest price lines and the lowest prices within the market
area.

2.

Extensive width and depth of consumer goods such as health


and beauty aids and housewares.

3.

Aggregate convenience including location, parking, hours, and


ease of purchase; features such as supermarket-like front
ends, total merchandise display, wide aisles, easy-to-see-andlocate merchandise groups, shopping carts, and usually a
single display floor.

Increase the quantity purchased


Improving the store layout and merchandise presentation
can help to create an atmosphere that is conducive to more
spending.
Encourage salespeople to cross-sell: Cross-selling involves
salespeople from one department attempting to sell
complementary merchandise from other departments to
their customers
For example, a salesperson who has just sold a pair of dress
pants to a customer would take the customer to the shirt
and tie area to sell the customer a shirt and tie that
complements the pants.

Increasing the frequency of custmers


Capitalise festive seasons
High impulse items leads to high traffic

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