BBPG Retail Strategic Dell

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RETAIL STRATEGIC PLANNING

W. Frank Dell II, CMCSeptember, 2004


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DELLMART & COMPANY 2

AGENDA

INTRODUCTIONSTRATEGY

TACTICS

OPERATIONS


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Objectives

Define Retail StrategicDocument components and elements

Describe the development process

Identify common mistakes


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Strategy Definition

A plan, method or series of

maneuvers for obtaining a

specific goal or result


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Overview

Corporate

Goals

Strategic

Plan

Tactical

Plan

OperationsPlan


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Time Horizon

DESCRIPTION 1 2 3 4 5 6 7 8 9 10

Corporate Goals

Strategy

Tactics

Operations


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Maslow Theory

Self-

Actualization

Esteem

Love, affection &

belonging, safety

Physicological


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AGENDA

INTRODUCTION

STRATEGY

TACTICS

OPERATIONS


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What Business?

Business

Products Type

Industrial Consumer Service Wholesale Retail


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Business Goals

Sales 1 million

5 million

100 million

1 billion

Geographic

City/Region

Country Continent

World

Business

Market

Competition


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Consumer is King

The Golden Rule

He who has theGold(consumer) rules


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Which Consumer?

Buyer User/Customer


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Define the Target Market

SexAge

Education

Income

Life Style

Ethnicity


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Target Market - Sex


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Target Market - Age

Infant1 to 3Junior3 to 8

Youth8 to 12

Teen12 to 19

Young Adult19 to 30

Middle Age Adult31 to 55

Senior Adult55 to 100


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Target Market - Education

No educationElementary School

High School

College / University

Advanced Degree


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Target Market - Income

Person Vs HouseholdIncome

2,100 Rubles per month

3,500 Rubles per month 7,000 Rubles per month

10,500 Rubles per month

14,000 Rubles per month 17,500 Rubles per month

17,501 + Rubles per month


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Target Market Life Style

VegetarianDiabetic

Over-weight

Health nut

Active


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Target Market - Ethnicity

Geographic regionRace

Religion


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Target Market

Sex M F H

Age I J Y T YA MAA SA

Education No ES HS C/U AD

Income 2.1 3.5 7 10.5 14 17.5 18+

Life Style V D OW H A

Ethnicity R R R


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Factor in Trends

Aging populationGrowing Middle Class

Changing Health & Life Style


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Elements Format Size

How many formats & what size?Receiving & Backroom Processing

Merchandise Display

Office Customer Service & Checkout


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Elements - Merchandise

Reason for the storeDepartment / Category / Sub-Category

Match target customers needs & wants

Interest secondary consumers

Depth and Breath of presentations

Brands

Sizes Flavors / Styles


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Elements - Merchandising

RoleDestination

Routine

Occasional / SeasonalConvenience

Quality

Good

BetterBest


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Elements - Decor

FixturesLighting

Flooring

Signage


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Elements - Services

Checkout Cash

Credit & Debit card

Sales assistance

Returns

Lay-A-Way

Gift Registry

DemonstrationsSampling

Delivery

Installation

Education


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Brick Vs Click

PositivesAdditional Sales

Brand building

Reach larger targetmarket

Lower investment

NegativesDifferent business

Delivery

Divides resources


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Operating & Capital Models

Sales- Cost of Goods

= Gross Margin

- Labor & Benefits- Utilities

- Rent

- Advertising

- Taxes

= Profit

Site+ Store Construction

+ Fixtures

+ Merchandise= Capital Cost

Payback


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Validation

Target

Customer

Market

Strategy Competition


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AGENDA


TACTICS

OPERATIONS


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Overview

Advertising

(ABC)

Advertising

(ABC) PricePrice DiscountDiscount

DisplayDisplay POPPOP SeasonSeason


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AdvertisingTelevision

MagazineRadio

NewspaperInternet

Mail


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Pricing

Hi Lo

Everyday Low Price

Seasonal


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Categories

Traffic Building - High share, frequent purchase

Transaction Building - Higher price, impulse buy

Profit Contribution - High gross margin, turns

Cash Generation - High turn, frequent purchase

Excitement CreatingImpulse, lifestyle

Image CreatingFrequent purchase & promotion

Turf DefendingCustomer draw


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Promotions

TypesUnlimited Price off

Buy one get one

Continuity

Coupons

Joint SKU

Match target consumers desires

Support strategic imageIncorporate Frequent Shopper Program


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Location, Location, Location

Where Work

Live

PlayTravel mode

Walk

Drive Public transportation


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AGENDA


TACTICS

OPERATIONS


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Introduction

A Strategic Plan that is or can not beexecuted is only a dream

Each Department must define anaction plan to achieve the strategy


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Human Resources

AttractEducate and Train

Evaluate

Retain


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Logistics

Inbound Store Vs Warehouse Delivery

Method (truck, rail, water)

Storage & Processing Number warehouse by commodity

Location and size

Outbound Frequency, distance, temperature


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Information Technology

Hardware Processing power

Security & back up

Software

Transaction processing

Management control & reporting

Analysis and planning

Network Volume

Distance


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Commercial

Selection Categories, Sub-Categories & Items

Pricing & Promotion

Inventory TurnsMerchandise in-stock


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Finance & Accounting

Manage cashMaintain budgets and controls

Secure sufficient capital


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Summary

Corporate

Goals

StrategicPlan

Tactical

Plan

Operations

Plan


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Fatal Sins of Strategic Planning

Have a weekend retreat once a year totalk about strategy

Viewing Strategy as a diet

Develop vision, mission and/or valuestatements as fluff

Vision without action

Failing to involve all in developing an

action plan

Failing to integrate planning


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Fatal Sins of Strategic Planning

Conducting business as usual afterstrategic planning

Lacking a scorecard or measurement

Doing what is easy rather than what isimportant

Neglecting to benchmark against

competitors

Failing to make tough choices


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W. Frank Dell II, CMCPresident

DELLMART & Company

125 Hardesty Road

Stamford, CT 06903 USA

Tel: 203-968-8609

Fax: 203-968-8613e-mail: [email protected]

Web Site: www.Dellmart.com

Documents

BBPG Retail Strategic Dell