2. Introduction
• Retailing Strategy outlines the mission and
vision of a retail organization
• Sets the tone for creating sustainable
competitive advantage through the optimization
of available resources
• Its more a planning process
3. Strategic Retail Planning Process
• Deciding the store’s philosophy, mission &
objectives
• Situation Analysis
• Formulation of Retail Strategy
• Strategy Implementation & Control
5. Philosophy Speaks About Company
• Starts with identification of store’s mission for its
existence & its scope
• Mission Deals with
• Goods & services to be offered
• Customer Satisfaction
• Sustainable Development
• Competitors
• Involves the way of Store’s functioning
6. Objectives
• Objectives classified as:
• External Store Objective
• Internal Store Objective
• External objectives define the impact of store
on its environment
• Internal objectives define how much is expected
to be achieved with the available resources
7. Some of the Missions & Objectives
• Brand Philosophy of Croma
• If service wasn't important.
• If technology wasn't complex.
• If variety wasn't confusing.
• We would have no reason to be in business.
• We help you buy
• “Future Group shall deliver Everything, Everywhere, Everytime for
Every Indian Consumer in the most profitable manner”
• At Westside our mission is to be the most preferred and consistently
profitable lifestyle retailer
9. External Analysis
• Economic environment of retailing
• Political environment of retailing
• Legal environment of retailing
• Socio-cultural environment of retailing
• Technological environment of retailing
• International environment of retailing
10. Internal Analysis
• Objective is to identify the store’s capabilities &
weaknesses
• Resources grouped into:
• Human Resources
• Financial Resources
• Physical Resources
• Intangible Resources
11. Human Resources
• Sufficient Strength of employees at various levels
• Trained and capable employees to perform
assigned tasks
• Loyalty of employees
• Punctuality & regularity
• Competency Mapping for multitask performance
12. Financial Resources
• Total cash flow from store’s present activities
• Ability of the store to collect money during
requirement / emergency
• Effective and stable financial policies
• Ratio between fixed and current assets
• Contingency plans in case of negative cash flows
13. Physical Resources
• Contribution of fixed assets
• Position of abandoned / unused assets
• Effective & updated Store’s information system
14. Intangible Resources
• Present capability of company’s management
• Effective R&D cell
• Competitor’s Intelligence System
• Effectiveness of store’s loyalty programmes
• Capability of store manager
• Loyalty of customers towards store products
15. Porter’s Five Forces
Suppliers:
• Single Brand
• Multi Brand
• Niche Brands
• Exclusive Products
• Suppliers’ dependence on Volumes
Substitutes:
Threats:
Competition
• Buyer Willingness
• Technology
• Organized Vs. Unorganized • Opportunity Gain / Loss
• Economies of Scale
• Diversity of competitors • Assortments of
• Absolute cost advantage
• Cost Conditions Merchandise
• Capital Requirement
• Exit Barriers • Rising Consumerism
• Government & Legal barriers
• Low Switching cost
Buyers:
• Organized vs non-organized Retail
• Buyers’ Information
• Cost of Product
• Product Assortments differentiation
• Buyer’s power to Negotiate
• Switching cost of Buyers
17. The Igor Ansoff Matrix
Existing New
Market Penetration
Market Development / Expansion
Existing
• Increase the Basket Size
• New Market Segments with
• Increase the Customer
RETAIL FORMATS
existing formats
• Increase the Purchase
• New Customer Base
Frequency
Retail Format Development Diversification
New
• New format with existing • New Retail formats directed at
customers new market segments
MARKET SEGMENTS
18. Market Penetration
• Strategy adopted by firm seeking growth with
existing products in the existing market segment
• Customers can be increased by:
• Adding new stores
• Modifying product mix
• Cross-selling by salesperson can increase the
basket size. (Shirts with trousers, Pizza with Pasta)
• Buying frequency can be increased through
multiple offers and freebees
19. Market Expansion / Development
• Market Expansion can be done through reach outs to
new market segments or completely changing customer
base.
• It can be done by:
• Tapping new geographical markets
• Introducing Products to the range that will appeal to wider customer
base
• Addition of new stores in new cities or new areas in the
city
• Introduction of merchandizes like Pharmacy, Mobile etc.
will appeal to a totally new set of customers
20. Retail Format Development
• Carries more risk as the format may fail
• Normally used when the retailer wants to
introduce new product to existing customers
• E.g. CCD Express, Smaller retail formats of
Subway or Dominos or Crosswords corner etc.
21. Diversification
• Develop new products for new markets
• E.g. ITCs foray from tobacco based products to
introduction of FMCG like foods and apparels
(Wills Lifestyle). Latest additions are Greeting
Cards.
• Expanding across countries is also
diversification.
22. Developing the Strategic Plan
• How to Target Customers
• Look at the entire market from both size and segments
• Identifying a smaller segment that appeals the retailer
• Test marketing
• Final identification of the target customers
• Retailer should evaluate:
• Growth Potential of each target segment
• Investment needed to compete
• SWOT of the competition
23. Developing the Strategic Plan
• Retailer must ensure the following in order to be
successful in segmenting the market:
– Measurable : Is the segment measurable and
identifiable?
– Accessible : Desired response of the focus
marketing
– Economically Viable : Whether enough space is there
in the segment to make the
entry profitable
– Stable : Are customer characteristics
stable indicators of the market
potential
24. Implementing the Strategic Plan
• Merchandise must be single minded
• Displays must appeal to target market
• Advertising must talk to it
• Personnel must have empathy for it
• Customer service should be designed in accordance
with target market
• All implementations should follow-up with controls like
effectiveness of the long term competitive strategy.
26. International Trade
• Rise because of two factors:
• Removal of trade barriers between countries
• Rise in consumerism
• Retailers start as local or regional players
• Improve operational efficiencies and then become national
players
• Reasons for entering international market
• Saturation in domestic market
• Reach Dominance in domestic market
• Consumer behaviour is instrumental in shaping the business
of international retailer
27. Methods of Entering International Market
• Export
• Franchising / Licensing
• Mergers and Acquisitions
• Joint Ventures
• Organic Growth
30. Ethics in Retailing
• Customers
• Recognize rights of the customers regarding safety,
information availability, freedom to exercise choice,
delivery of services and grievances
• No regulations available in India
• Issues pertaining to invasion of privacy through electronic
media (Tele-calling, etc.)
• Community and the General Public
• Avoidance of hoarding and black marketing
• Contribution to charity
• Environmental sensitivity
• Avoid selling of socially taboo products like tobacco
31. Ethics in Retailing
• Employees
• Fair employment practices compliant with employment
legislation
• Equal Opportunities employment
• Addressing Employees’ grievances
• Issues related to Sexual harrassment at work places
• More responsibility towards women employees
• Addressing Employee dishonesty
• Trusting his employees
• Business Partners (Suppliers, Logistics
Organizations, Banks, Other Professional
Organizations)
• Conducting Business in transparent manner
• Delivering value to all stakeholders
32. Ethics in Retailing
• Shareholders
• Highest standards of corporate governance
• Recall programmes for building trust of the customers
• Issues like Child Labour
Retailers resort to carpet bombing strategy as a part of aggressive expansion plans. A rapid roll out offers advantages like Building Economies of Scale, Creating Entry barriers, Capturing possibly scarce resources in terms of location, manpower etc and Building brands.
