Retail Planning:

Retail planning is the process by which the management members of an retail envision its future and
develop the necessary procedures and operations to achieve that future.

Importance of Retail Planning

Retail planning is very important for the following aspects

1.Store Location
First of all, the Store location is very important. The frequency of our sale depends
on the store location, especially when our business focuses on offline sales. store
location also increases the connectivity and network if our store is in the primary
place, we can convert sales through reference. So proper retail planning is very
important while selecting the location for retail store.

2.Merchandising (the activity of promoting the sale of goods, especially by their

presentation in retail outlets)
If you are selling a product then you have to have all the options for your customer.
A customer can come for anything you can help them for their needs of the
products. These ways you can easily manipulate the market. Merchandising
strategy should match the sales strategy. So retail planning is important to adopt
and decide proper merchandising.
.
3. Pricing.
Pricing is one of the important factors in retail. It depends more on your
advertising, promotion, communication, sales than anything else. The retailer has
to provide the right price to the customers. so Proper retailing planning is very
important to decide pricing by taking into consideration of all advertising,
promotion, communication etc.

4.Marketing.
There is also a big factor in the marketing strategy in the market which the retail
organization chooses to compete. In the end, the result should be recorded to
measure and evaluate that the strategy is working or not and any necessary changes
should be effective.
The retail planning is done to improve the performance as per the consumer
requirement by adopting proper marketing strategy. So retail planning is important
to decide good marketing strategy.
5. Guideline for employees
If proper retail planning is done then retail shop will be having a proper guide
towards the direction to which it has to go taking its employees together. Once the
whole team move/go towards common goal, achievement of goal becomes faster
and easier.

6.Effective control:
Once the team is moving towards common goal which is determined through
proper retail planning, it is very important for the management to have a proper
and effective control over its employees and all the process and activities.

Retail Planning Process

1 Set objectives
Setting Objectives is important for the success of the business. It is not necessary
that the objective of a business is to maximize sales. An organization can pursue
multiple goals at the same for example, expansion of business in a year, revenue
generation, and more product lines etc. it is apparent(ಸಸಸಸಸಸ) that all goals
mentioned above are focused on multiplying sales.

Broadly the objective of an organization can be divided into two categories:

 a) External Objectives:
The external objectives of an organization include the performance of the
organization in an external environment focused on customers. Such as
providing customer satisfaction and increasing their loyalty for the products etc.

b) Internal Objectives:
On the other hand, internal objectives consist of sales goal, revenue generation,
maximizing the sales using existing resources, etc.

Both objectives are important for an organization. But only clear objectives can be
easy to achieve, and planning can be done accordingly to attain these objectives.
Therefore, it is important for a retailer to set annual objectives to ensure success
and to measure it.

2. Analysis of the market (SWOT Analysis)

After the objective for the organization is defined. The next step is to analyze the
situation of the market you are planning to enter.

The analysis can help you to make an effective decision. you can learn about the
competitors’ strategies and plan your strategies accordingly, what are the
expectations of your customers and how you can fulfill them, how you can stay
ahead in competition in the market, etc.

The analysis can help you to learn about the threats and opportunities in the market
and what actions you should take. In addition to this, analysis can help you to learn
about the strengths and weaknesses of your own business.

3 Analysis of Customers
Analysis of customers is the most important activity of the retail planning process.
You can’t simply like a product, design it and throw in the market and expect
customers to buy it and like it.

By analyzing the customers, you need that what are the expectations and
requirements of customers and you select a segment of potential customers who
are most likely to buy your products. You can plan your business strategies better
if you know your customers.

You can optimize your marketing mix to satisfy your customers. Customers
analysis helps the organization to innovate and create services to satisfy its
customers and retain them for a long period.

Hence, you avoid the chances of getting out of fashion as you keep updating your
strategies with the changing demands and requirements of customers.

4 Frame Retail Strategies

After you have decided key objectives and learned about the market situation and
customers requirements, next you should prepare your retail strategy for
marketing positioning and retail mix.

The market strategies should be prepared based on kind of products sold in your
store or the segmentation of the market you are dealing with.

The meaning of retail mix is to have the balanced amalgamation (ಸಸಸಸಸಸ) of retail
activities, and the meaning of retail positioning is the strategy of the retailer to
enter the target market and establish his business to compete with the competitors.
It is important to pay attention to these processes to grab the attention of your
potential customers and make establish a positive image of your retail business.
You need to prepare effective retail strategies to stay ahead in the game of
retailing. Work on various elements such as the location of the
store, pricing policy, advertisement, customer service, etc. for example, you can
attract customers by offering good quality of products at lower prices than your
competitors or central location of the store can be a key element to attract more
customers.
5 .Strategic Short-term Planning
In the next step, the retailer must think and plan about the short-term plans to grow
your business. For example, you can attract more customers in your store during
the festive season by using tactic advertising and marketing strategies.

You can run a short-term TV advertisement or can circulate advertising pamphlets

in the local market. Strategic short-term plans are important for boosting sales
instantly. Therefore you should start planning short-term plans before the
beginning of the festive season. Your planning should be as per the requirement of
the event. For example, an advertisement plan for deepawali can’t be the same as
the advertisement plan for Christmas.

6 .Implementation of the Strategies

Once you have decided strategies, the final step is to implement those strategies
and control them. In this step, you will also check whether your
strategizzzzzzzzzzzes are working or not and how much they have helped in
boosting the sales.

Implementing strategies is not easy, it requires thorough planning, and you need to
make changes in the store, and you may also need to change the role of your
employees.

You might face some reluctance from your employees but if you plan smartly You
can divide the work among your employees in such a way that they don’t feel
burdened. In addition to this, you can also give them a bonus if their work pays off.

7. Analyzing the performance of the strategies

Your job does not end with the implementation of strategies. You should analyze
its performance and see where did you face most difficulties and what kind of
issues did you face. Learn about them and take your lessons and implement them
in your future strategy planning.
Developing retailing strategies:
Retailing Strategy: Retailing strategy is a holistic marketing plan for a product or
a service to reach and influence the consumers. This strategy covers everything
from what product or service will be available in to what should be the price or
sales incentive to be given and how to display the product in the shelf.

Following factors have to be considered in order to develop retailing strategies

1. objectives: important part in developing retailing strategies is to know the

objective of strategies. Here why the strategies have to be done and what are the
aspects to be covered is decided. Most common objectives of retailing strategies
may be:

a) Increase number of customers

b) Effective cost control

c) Effective staff control

d) To move with current trend

e) Increase satisfaction level of customer

2. Action plans: The Retailing strategy is incomplete until detailed action plans
are in place.
Effective action plans must:
 Be capable of implementation

 Achieve required goals and objectives

 Be traceable and measurable
Most plans fail not because they were inappropriate but because they were not
effectively put into action. The planning management process is a continual and
interactive process whereby the business will plan, act, reflect, evaluate and then
plan again.

Some of action plans may be:

a. SET YOUR TARGETS: Your growth rate is the percentage change in

your turnover each year - one of the biggest mistakes business owners
make is setting unrealistic growth rates for their business. However, not
having a target to focus on can have even more negative effect. While
substantial growth is possible, but know what is going to get you there?
More sales staff? A merger with another business? A new contract? Better
facilities or more warehouse space? Know what growth you want, and
what actions are going to assist you to achieve your aspirations.

B.UP-SELLING AND RETENTION STRATEGY.

Each sale we make has a transaction cost. The more revenue that is part of
this transaction, the lesser the percentage of the cost to do the transaction
becomes. Up selling and value-add options allow for additional revenue
and gross profit generation, with an overall lesser transaction cost. Your
current customers are also a valued source of extra income and should be
treated as such. Create clear plans for staff around customer service and
how to provide your customers with the best experience when they are in
your store.
You may find its worth starting to capturing more data and feedback from
your customers so that you can understand and engage them bet ter.

C.CUSTOMER ENGAGEMENT PLAN.

“Can I help you” just doesn’t cut it. Find engaging ways to interact with
visitors to your store. They came in for a reason, help them, but don’t
make it purely transactional. Learn the art of conversation and you will
have customers who come in for a chat, and will buy more.
Develop scripts for your team as part of your Customer Engagement Plan.
D.MERCHANDISING PLANNING - USE YOUR
WINDOW
Retail windows are expensive real estate but are fantastic when they are
utilized to sell your product. They need to reflect your brand, your
personality, and drag potential customers inside where yo u can work your
magic on them. If they change regularly and appeal to your target
audience, they will be reviewed regularly by the passer by who will then
make an impulse decision to enter. Once they enter, the display of the
products in store should stimulate interest in customers to make a
purchase.

E.MAKE A PLAN TO MOVE OLD STOCK

Some products may be hard to move. See through the eyes of a potential
customer and come up with ways that may encourage them to
buy. Remember that you are not a customer of your own store, so it
doesn’t have to appeal to you. Ask yourself "What other ways can I
present or package these products?"

3. PRICING STRATEGIES

A pricing strategy is a model or method used to establish the best price for a
product or service. Pricing strategies take into account many of your business
factors like revenue goals, marketing objectives, target audience, brand
positioning. They’re also influenced by external factors like consumer demand,
competitor pricing, and overall market and economic trends.
TYPES OF PRICING:

 Competition-Based Pricing
 Cost-Plus Pricing
 Dynamic Pricing
 Freemium Pricing
 High-Low Pricing
 Hourly Pricing
 Skimming Pricing
 Penetration Pricing
 Premium Pricing
 Project-Based Pricing
 Value-Based Pricing
A. Competition-Based Pricing Strategy
Competition-based pricing is also known as competitive pricing or competitor-
based pricing. This pricing strategy focuses on the existing market rate (or going
rate) for a company’s product or service. it doesn’t take into account the cost of
their product or consumer demand.
Instead, a competition-based pricing strategy uses the competitors’ prices as a
benchmark. Businesses that compete in a highly saturated stage may choose this
strategy since a slight price difference may be the deciding factor for customers.

b. Cost-Plus Pricing Strategy

A cost-plus pricing strategy focuses solely on the cost of producing your product or
service. It’s also known as markup pricing since businesses who use this strategy
“mark up” their products based on how much they’d like to profit.

To apply the cost-plus method, add a fixed percentage to your product production
cost. For example, let’s say you sell shoes. The shoes cost Rs.250 to make, and you
want to make a Rs.250 profit on each sale. You’d set a price of Rs500, which is a
markup of 100%.

Cost-plus pricing is typically used by retailers who sell physical products. This
strategy isn’t the best fit for service-based companies as their products typically
offer far greater value than the cost to create them.

c. Dynamic Pricing Strategy

Dynamic pricing is also known as surge(ಸಸಸಸಸ) pricing, demand pricing, or time-

based pricing. It’s a flexible pricing strategy where prices fluctuate based on
market and customer demand.
Hotels, airlines, event venue companies use dynamic pricing by considering
competitor pricing, demand, and other factors. These allow companies to shift
prices to match when and what the customer is willing to pay.

d. Freemium Pricing Strategy

A combination of the words “free” and “premium,” freemium pricing is when
companies offer a basic version of their product hoping that users will eventually
pay to upgrade or access more features. freemium is a pricing strategy commonly
used by software companies. They choose this strategy because free trials and
limited memberships offer a “peek” into a software’s full functionality and also
build trust with a potential customer before purchase.

For example, companies who offer a free version of their software can’t ask users
to pay Rs.1000 to the paid version. Prices must present a low barrier to entry and
grow incrementally as customers are offered more features and benefits.
e. High-Low Pricing Strategy

A high-low pricing strategy is when a company initially sells a product at a high

price but lowers that price when the product drops in novelty(ಸಸಸಸಸಸ) or relevance.
Discounts, clearance sections, and year-end sales are examples of high-low pricing
in action.

High-low pricing is commonly used by retail firms who sell seasonal or constantly-
changing items, such as clothing, decor, and furniture.

f. Hourly Pricing Strategy

Hourly pricing, also known as rate-based pricing, is commonly used by

consultants, contractors, and other individuals or laborers who provide business
services. Hourly pricing is essentially trading time for money. Some clients are
hesitant to honor this pricing strategy as it can reward labor instead of efficiency.
g. Skimming Pricing Strategy

A skimming pricing strategy is when companies charge the highest possible price
for a new product and then lower the price over time as the product becomes less
and less popular. Skimming is different than high-low pricing in that prices are
lowered gradually over time.

h. Penetration Pricing Strategy

Contrasted with skimming pricing, a penetration pricing strategy is when
companies enter the market with an extremely low price, effectively drawing
attention (and revenue) away from higher-priced competitors. Penetration pricing
is not sustainable in the long run, however, and is typically applied for a short
time.
This pricing method works best for brand new businesses looking for customers or
for businesses who are breaking into an existing competitive market. The strategy
is all about temporary loss and hoping that your initial customers stick around as
you eventually raise prices.

i. Premium Pricing Strategy

Also known as premium pricing and luxury pricing, a premium pricing strategy is
when companies price their products high to present the image that their products
are high-value, luxury, or premium. premium pricing focuses on the perceived
value of a product rather than the actual value or production cost.
premium pricing is a direct function of brand awareness and brand perception.
Brands who apply this pricing method are known for providing value and status
through their products which is why they’re priced higher than other competitors.
Fashion and technology are often priced using this strategy because they can be
marketed as luxurious, exclusive, and rare.

j. Project-Based Pricing Strategy

A project-based pricing strategy is the opposite of hourly pricing .this approach

charges a flat fee per project instead of a direct exchange of money for time. It is
also used by consultants, contractors, and other individuals or laborers who provide
business services.

k. Value-Based Pricing Strategy

A value-based pricing strategy is when companies price their products or services
based on what the customer is willing to pay. Even if they can charge more for a
product, they decide to set their prices based on customer interest and data.
If used accurately, value-based pricing can boost your customer sentiment and
loyalty.
https://blog.hubspot.com/sales/pricing-strategy
4.Location strategies:
A retailing location strategy is a plan for obtaining the optimal location for a
company by identifying company needs and objectives and searching
for locations that are compatible with these needs and objectives.

Location refers to the general position of a shop a city district, a neighborhood

area, along a major road or secondary Street, or a shopping mall. Site refers to a
shop’s specific spot. Choosing a shop location is a strategic exercise because it is a
decision which has long-term implications on the retailer’s image, positioning,
sales and cost.

Major steps involved in developing retail location strategy:

a) Distinguish the Types of Products: The types of products sold by a

retailer determine the choice of location for the shop. Typically, there are
three major categories of products:

 Convenience goods
 Shopping goods
 Specialty goods

Convenience products usually refer to goods that are low-priced and bought
frequently and habitually by consumers. These types of products are sold in many
outlets and little sales effort is required. Examples are FMCG products, Sweets,
Fruit Juice, Cigarettes etc. It is important for stores selling convenience goods to be
located in places with many people, that is ‘quantity’ of people is important.
Shopping products usually refer to mid-priced to high priced goods that are sold
in selective outlets. In addition, consumers tend to compare features and prices,
and purchase these goods less frequently. More sales efforts are required by the
sale associates. Examples are fashion accessories and furniture. For stores selling
such products, the ‘quality’ of people (the right type of people) passing by the
location is important.
Specialty products refer to goods that are more expensive and are bought very
infrequently. Substitutes are not considered and these goods are sold at limited
outlets. Examples are specific brands or designer fashion labels and fine jewelry.
These shops are best located in exclusive malls or high streets with compatible
brands and labels catering to high-end customers.

b) Identify Consumers

The categories of products sold by a retailer influence the types of customers

supporting the shop. A retailer needs to have a clear understanding of its customers
and their profile as they form the basis for the factors used in the assessment of the
type and address of the location chosen. The following questions may help retailers
to have a better understanding of their customer segments.

 How many are they?

 What is their age range?
 Where do they stay?
 What are their income levels and propensity to spend?
 Which type of products they consume?
 What are their purchase considerations for the target products?
 How far are they willing to travel to the store?
c) Identify Competition & Complementary category stores

It is integral to identify relevant competition as well as complementary stores

(A complementary business, on the other hand, offers products or services that
relate to your business and appeal to your customers but don't take the place of
what you offer. Eg: An athletic apparel store and a gym are complementary store)
within proximity of the shortlisted location. Competition intensity will define the
marketing strategy & efforts while Complementary stores will help generate
pedestrian traffic for the store. For Example: Ladies apparel stores and footwear
store will generate footfall for one another.

d) Evaluate Location

The evaluation of following factors must be considered while selecting a suitable

location:
a. Number and types of pedestrians: This refers to the number and types of
people passing by the location. However, not everyone who passes by a location is
a potential customer. An accurate pedestrian count includes the following four
details:

 Age and gender

 Time – Weekday/weekend; peak/non-peak hours
 Interviews with pedestrians to find out if there are a sufficient number of
potential shoppers
 Revisiting the location on another day to verify the information collected
earlier
It is important to note that when all the other factors of two locations are equally
good, the one with the highest number of potential pedestrians is considered the
most suitable.

b. Number and types of vehicles: Similar to pedestrian count, retailers analyze

the type and quantity of vehicles that pass by the location. Another aspect of
vehicular flow is traffic congestion.
c. Accessibility: A shopping location has to be accessible so that shoppers are
encouraged to visit the place. Availability of mass transportation is also considered
under this factor.
d. Parking availability: Customers like shopping locations that have cheap
parking facilities. This is especially important for retailers who mainly target
customers who drive. Availability of parking brings convenience to customers.
Customers who buy groceries from a supermarket will want to be able to load their
purchases into their cars at nearby parking lots.
e. Regulations: A Retailer interested in a location has to find out if there are any
regulations pertaining to the operations of the shops in the place or mall. Some of
these regulations are as follows:

 Business hours are usually fixed

 Usage of common areas outside the shop is restricted
 Scope of renovation permitted in the shop has to be adhered to
 Types of signs used must be within established rules
5) VISUAL MERCHANDISING AND DISPLAYS:

Visual merchandising includes all of the physical elements

that merchandisers use to project an image to customers or Coordinating the
physical elements in a place of business to project the right image to customers.

VISUAL MERCHANDISING TECHNIQUES TO INCREA SE

SALES

1. CREATE DISPLAYS F OR TARGET CUSTOMERS

The customer’s journey begins with discovery, then moves into option comparison
before the final conversion and sale. Setting the stage for your target customers
using visual merchandising is a key element in taking them from discovery to sale.
Who are your target customers? That’s an important question when designing
displays. Aim to appeal to their lifestyle or the lifestyle they desire.

2. LESS CAN BE MORE

A visual assault on the senses irritates the customer. Too many items and clashing
colors results in a display that looks like a baby tossed all the toys on the floor. the
result is mess. When irritated, customers tend to walk away. Avoid mess in
displays. Instead focus on spotlighting a single item or a few related items to create
a theme/story.

3. TELL A STORY
A story for your visual merchandising display helps both during the design process
and makes it easier for the customer to connect with the product. The story can be
specific to a single display or be made to flow through the entire retail space by
using a singular related theme from display to display. Begin at the storefront with
the main window or space near the entrance.
4. BE SPECIFIC WITH SIGNAGE
The display may showcase the items perfectly, but if the signage fails, it all fails.
Avoid wordy signs too much information gets ignored. Try the five-second rule.
You should be able to easily read the sign in five seconds or less, absorbing its
meaning without any confusion.

5. WINDOW DISPLAYS A TTRACT FOOT TRAFFIC

Display the new and more valuable products in the window or nearest the entrance
to attract foot traffic. First impressions do make a difference. A passer-by won’t be
interested in a storefront that appears dark, dirty or neglected. The front windows
need to be kept clean and the display well-lit or lit to create an emotional impact.
Sometimes, however, minimal lighting works best for specific designs. Again,
signage should be clear and connected to the theme/story of the window.

6. SALES TEAM KNOWLE DGE

Every member of the sales team needs to be knowledgeable about the items present
in the visual merchandising displays. If a team member cannot answer a
customer’s question, confidence falls and the potential to lose the sale increases.

7. ANALYZE WEEKLY SA LES AND CHANGE DISPL AYS

Your visual merchandising is another touch point in the customer’s decision
journey. To be effective, it’s important to analyze weekly sales and determine if
and how displays are affecting sales. Old displays become invisible to regular
customers. so Keep it fresh to increase potential for conversions.
Display refers to the visual and artistic aspects of presenting a product to a
target group of customers.

Most Effective Types of Retail Displays

1.Dump Bins
Dump bins certainly live up to their name they are literally giant bins in stores that
are commonly stocked with individually packaged products. You’ll often see them
full of candy other small products that provoke impulse buys.
https://www.instagram.com/p/BjqRSlLHtJy/?utm_source=ig_embed

2. Freestanding Displays
Freestanding displays are similar to dump bins in that they are also standalone
displays and can be interacted with from 360 degrees. That being said, they are
more organized in appearance than dump bins, and often neatly display slightly
larger products on shelves or hooks. Like dump bins, freestanding displays are also
commonly made out of cardboard, so they are a great chance to experiment with
some attention-grabbing shapes or designs.
https://www.instagram.com/p/BeUSxRwgIDv/?utm_source=ig_embed

3. Entryway Displays
Displaying your products near entryways can put your brand at the top of shoppers
lists before they even see your competitors. Entryway displays are effective at
encouraging impulse buys, as customers at the beginning of their shopping trip are
entering the store ready to spend money. If you’re lucky enough to be in a place
with nice weather, setting up an outdoor entryway display is a great way to catch
shoppers’ attention before they even get inside.
https://www.instagram.com/p/BurYKGkgZEj/?utm_source=ig_embed

4. Gondola Displays
Gondolas are two-sided standalone with shelves that also appear in larger, more
open areas of a store. They have adjustable shelves, which makes them
customizable to accommodate different sized products. While they typically are
made with steel frames and pegboard, there are options for brands to promote their
product through graphics and an attractive color scheme.
https://www.instagram.com/p/Bgo6CIHlghk/?utm_source=ig_embed

5. Display Cases
Retail display cases are a type of standalone display that is closed in on all sides by
glass or clear plastic. To access the products, shoppers may have to speak to a store
associate to retrieve the item from the case for them. Other times, if the case is
serving an ornamental purpose, shoppers can find the product on its home shelf.
Because of their security, higher-end products will often find their way into these
displays.
https://www.instagram.com/p/Buqbkb4ADAj/?utm_source=ig_embed

6. Window Displays
Window displays, also known as window dressings, are exactly what they sound
like product displays that are set up in the window of a retailer.
https://www.instagram.com/p/Burr52mnwdl/?utm_source=ig_embed

7. Banner Stands
Banner stands are standalone signage that brands can place throughout the store to
feature their product or announce a promotion. Banner stands are inexpensive,
mobile, and effectively catch shoppers’ attention.
https://www.instagram.com/p/Bt3i8NlApCk/?utm_source=ig_embed

8. Clip Strips
Clip strips are long, vertically hanging strips with hooks that are ideal for holding
small products. Using clip strips gives you a chance to get your products on
shelves beyond your primary placement. They are ideal for cross-merchandising,
as you can set up a clip strip display of chips next to salsa, or lip balm next to other
cosmetics.
https://www.instagram.com/p/BstlHaOHzqQ/?utm_source=ig_embed
9. Display Tables
Display tables are also a very common clothing display, likely due to their
versatility. Display tables can host a variety of products, from apparel to
accessories to jewelry. One benefit of display tables is the amount of room they
provide for merchandisers to get creative. Create themes around your brand, the
season, or holidays by incorporating signage and decorative elements.

10. Mannequins
Mannequins are the embodiment of visual merchandising. They display products in
a context that gives the shopper a clear visual of the product in use. To capitalize
on this visualization, merchandisers should use the best of their products to create
trendy outfits shoppers will want to wear themselves.