Strategic Retail Planning Process

Strategic Retail Planning ProcessDefinition 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 companyDeciding on objectives that management wants to achieveDeveloping 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 missionThe 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 AuditAfter 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 cyclesCompetitive factors- barriers of entry, competitive rivalry and bargaining power of vendorsEnvironment factors- economic, social, technological and regulatoryAnalysis 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 analysisManagement capabilitiesFinancial resourcesLocationsOperationsMerchandise Store managementCustomer loyaltyIdentifying the strategic opportunitiesAfter completing the situation audit, the next step is to identify the opportunities for increasing sales.Growth strategiesEntry strategiesGrowth 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 penetrationIt 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:the number of customersthe quantity purchased by customerspurchase frequency.Increase the number of customersIt 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:The lowest price lines and the lowest prices within the market area.Extensive width and depth of consumer goods such as health and beauty aids and housewares.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-and-locate merchandise groups, shopping carts, and usually a single display floor.

Increase the quantity purchasedImproving 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 customersFor 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 custmersCapitalise festive seasonsHigh impulse items leads to high trafficSheet1Market PenetrationMarket DevelopmentRetail formatExistingIncrease number of customersReach new segments with existing formatsIncrease quantity purchased by customersExpand marketsIncrease purchase frequency

Retail Format DevelopmentDiversificationNewOffer new retail formats to existing customersDevelop new retail formats targeted at new segments

ExistingNewMarket segment

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