Retail strategy

Retail strategy
See also

Retail strategy is an integrated marketing plan for a product or a service to reach and influence the consumers. The retail strategy covers everything from what retail channels a product or service will be available into what should be the price or sales incentive to be given and how to place the product in the shop. It is a marketing plan which shows how a business provides to offer the company's products or services to consumers and influence their acquisitions. Typical retail strategy is able to show how to place and display a company's products. The retail strategy also shows how to encourage a potential customer at locations with products as price discounts, placement, retailer incentives, and signs. A retail strategy is an overall plan guiding a retail firm. It influences the firm's business activities and its response to market forces, such as competition and the economy[1][2][3].

Controllable and uncontrollable variables of the strategy

Many factors affect the sale of the products. Factors which influenced on selling products or services in a retail outlet are: price and discounts of the product, motivation structure followed, plans of promotions or placement of the product. The retail strategy is made up of controllable variables and uncontrollable variables[4][5].

Controllable variables:

  • Store location - competitors, transportation access, population density, the type of neighborhood, nearness to suppliers, traffics, and store composition are considered in picking a location
  • Managing a business – including the retail organization and human resource management (duties, policies, resources, authority, responsibility, and rewards), and operations management (tasks that elate customer, employee, and management goals);
  • Merchandise management - the general quality of the goods and services offering;
  • Pricing and communicating with customers – including the physical attributes, or atmosphere, of a store; the first physical element seen by customers: layouts and displays, floor colors, lighting, scents, music

Uncontrollable variables:

  • Consumers - target market and forms a strategy consistent with a client; trends and desires; a company cannot sell goods or services that are beyond the price range of customers or that are not wanted
  • Competition – target market and merchandising focus, to ensure that it help a competitive edge
  • Technology - computer systems are available for inventory control and checkout operations
  • Economic conditions - unemployment, interest rates, inflation, tax levels, and the annual gross domestic product (GDP)
  • Legal restrictions - retailers that operate in more than one state are obtained to federal laws
  • Seasonality - they can diversify offerings to carry a goods or service mix with items that are popular, in different seasons

Considered the controllable and uncontrollable variables the retail strategy should be effective.

Creating the retail strategy

The steps in planning and enacting a retail strategy are interdependent. Regardless of the size and type of company, every enterprise should follow some rules in creating a retail strategy plan[6][7][8]:

  1. Delineate the type of business in terms of the goods or service category and the company's specific orientation
  2. Set long-run and short-run objectives for sales and profit or market share
  3. Regulate the customer market to target on the ground of its characteristics and demand
  4. Arrange a comprehensive, long-run plan that gives general direction to the firm
  5. Implement a unified strategy that incorporates such factors as store location, product assortment, pricing, and advertising and displays to achieve objectives.
  6. Routinely evaluate performance and correct weaknesses or problems when observed

The orientation of the retail strategy

The customer orientation, coordinated effort, value-oriented, goal orientation lead to creating the retailing concept and finally to create retail strategy[9].

  • Customer orientation - the retailer determines the attributes and needs of its customers and aim to satisfy these needs
  • Coordinated effort - the retailer unified all plans and activities to enlarge the capability
  • Value-oriented - the retailer offers good value to customers, whether it be upscale or discount; the prices applicable for the level of products and customer service
  • Goal orientation - the retailer sets goals and then uses a strategy to complete them

Advantages of retail strategy

The process of strategic retail planning has a lot of advantages[10]:

  • provides an analysis of the requirements for doing business for different types of retailers
  • outlines retailer targets and ambitions
  • The company is able to determine how to separate itself from competitors and develop an offering that appeals to a group of customers
  • The legal, economic, and competitive environment is studied
  • A company's total efforts are coordinated

Footnotes

  1. Cuthbertson Ch.,(2004), p.29
  2. Berkhout C., (2015), p.9
  3. RTU, (2019), p.11
  4. RTU, (2019), p.64-69
  5. Zentes J., (2007), p.142
  6. Cuthbertson Ch.,(2004), p.5
  7. Berkhout C., (2015), p.14
  8. RTU, (2019), p.11
  9. RTU, (2019), p.13-14
  10. RTU, (2019), p.52

References

Author: Natalia Zajko