Retail strategy

• A clear and definite plan that the retailer outlines to tap the market and build a long term relationship with the consumer.

• Retail Mix:• 1)Store location• 2)Merchandising• 3)Pricing• 4)Marketing

Developing an Overall Retail Strategy

Controllable Variables:

•Store location•Managing business

•Merchandise management

and pricing•Communicating

with customer

Uncontrollable Variables:

•Consumers•Competition•Technology•Economic conditions

•Seasonality•Legal restrictions

RetailStrategy

Elements of retail strategies

• The target Market• Retail format• Sustainable competitive advantage

The Retail planning process

The Retail planning process

Mission statement

• Wal-Mart: To give the ordinary folk the chance to buy same thing as rich people.

• McDonald’s: Quality,service,convenience and value

• Shopper,s stop: To be a global retailer in India and to maintain the NO.1 position in the Indian market in the department store category.

Situation analysis

• PEST Analysis• SWOT Analysis• BCG Matrix• Porter’s five forces

Matrix to evaluate opportunities for strategic investments

• Define Strategic opportunities to be evaluated• Identify key factors determining Market

attractiveness and competitive positions• Assign weights to each factor.• Rate each strategic opportunity on 1-10 scale• Multiply the weights by each factors rating

and add across factors• Plot each opportunity on the matrix

Growth Strategies

• Market Penetration Cross selling

• Market Expansion

• Retail format development

• Diversification: Related Unrelated

Value Chain

Retail as pentagon player

• Product• Place• Value• People• Communication

Retail as Triangle player

• Systems• Logistics• Suppliers

International Expansion-A growth strategy

• 1)Export• 2)Franchising/licensing• 3)Acquisition and mergers• 4)Joint venture• 5)Organic Growth

Bases of Sustainable Competitive Advantage

1. Customer Relationship : Loyalty , Positioning

2. Location

3. Vendor Relationships

4. Information Systems and Logistics

Bases of Sustainable Competitive Advantage

5. Effective Employees

6. Low Cost Operations

7.Multiple Sources of Advantage

8.Unique Merchandise (Private Label Brand)

Benefits of Strategic Retail Planning

Provides thorough analysis of the requirements for doing business for different types of retailers

Outlines retailer goals Allows retailer to determine how to differentiate itself from

competitors Allows retailer to develop an offering that appeals to a group

of customers Offers an analysis of the legal, economic, and competitive

environment Provides for the coordination of the firm’s total efforts Encourages anticipation and avoidance of crises

Figure A3-1: Factors to Consider When Engaging in Global Retailing