Strategic Retail Planning Process (Retail Strategy 07.06.2021)

Strategic Retail Planning Process 

For the purpose of developing retail strategies, retailers are required to follow a step-by-step procedure or planning process.

The importance of strategic decisions for the future success of the business, a systematic approach is essential.

 

The strategic planning process, is normally divided into following steps:

1. Deciding the store’s philosophy, mission and objectives,

2. Situation analysis,

3. Formulation of retail strategy

4. Strategy implementation and control.

 

1. Deciding the store’s philosophy, mission and objectives:

The retail strategic planning process starts with the identification of store’s mission for its existence and hence the scope of the retail store. The mission of a store entails identifying the goods and services that will be offered to customers. It also deals with the issue that how the resources and capabilities of a store will be used to provide satisfaction to customers and how the store can compete in the target market vis-a-vis its competitors.

 

For example, Vishal Mega Marts, they have philosophy of customer satisfaction through “manufacturing to retailing”.

 

The store’s objectives may be classified into two parts:

(i) External store objectives, and

(ii) Internal Store Objectives.

External store objectives are those that define the impact of store on its environment, e.g., to develop high degree of customer confidence by providing quality goods at lowers prices.

Internal store objectives, are those that define how much is expected to be achieved with the available resources, e.g., to raise the store turnover by 15% in the coming year.

 

2. Situational Analysis (SWOT Analysis):

The objective of doing store’s situation analysis is to determine where the store is at present and to forecast where it will be if formulated strategies are implemented. The difference between current and future position (forecasted) is known as planning or strategic gap. Under organisational analysis, normally stores study their external environmental and internal environments.

 

External Analysis:

The purpose of examining the store’s external environment is to study the opportunities and threats in the retailing environment.

 

Internal Analysis:

The objective of studying internal environment of its own store is to identify the store’s strengths and weaknesses.

 

3. Formulation of Retail Strategy:

Retail Positioning is a plan of store’s action for how the retailer will enter the target market and will compete with its main competitors.

 

Retail positioning from a retail store’s point of view, is a step-by-step plan to create and maintain a unique and everlasting image of the store in the consumers’ mind.

 

Retail positioning is made possible under these circumstances:

(i) By differentiating the store’s merchandise from its competitors,

(ii) By offering high level of after sales services at nominal / no cost, and

(iii) By adopting low pricing policies.

 

The main elements a retail store manager has to face are:

i. Store’s location

ii. Merchandise classification

iii. Pricing policy

iv. Customer service mechanism

v. Visual merchandising

vi. Personal selling efforts

vii. Advertising efforts and

viii. Store’s internal and external environments.

 

4. Strategy Implementation and Control:

It is concerned with the designing and management of retail systems to achieve the best possible combination of human, financial, physical and intangible resources of a retail store to achieve the formulated objectives, without timely and effective implementation also requires scheduling and coordination of various retail activities.

 

For example, the coordination between the marketing and sales promotion department is a must for sales promotion to make success.

 

The spirit of team work is an essential part for the success of strategy implementation.

The implementation of new retailing strategies sometimes requires changes in the way of functioning and duties that can lead to resistance from employees. Therefore, stores should take positive steps to reduce this resistance to change and to convince the employees that it in a long term will be beneficial for both the store and employees.