Retail strategy is “a clear and definite plan that the retailer outlines to tap the market and build a long-term relationship with the consumers.” The definition of a retail strategy enables other areas within the organisation to determine their strategies. Primary of these are: Store location Merchandising Pricing Marketing 1 .

Steps involved in developing a retail strategy Establish Mission Analysis Situation Identify options F E E D B A C K Set objectives Obtain & allocate resources Develop implementation plan Monitor progress And control .

1 . The manner in which the firm intends to compete in its chosen markets Examples: Wal-Mart:”to give ordinary folk the chance to buy the same thing as rich people.1 position in the Indian market in the department store category. The mission statement highlights the following elements: The products and services that will be offered The customers who will be served The geographic areas that the organisation choose to operate in.” Shopper’s stop:”to be a global retailer in India.Define the mission or the purpose of the organisation: A mission statement describes what the retailer wishes to accomplish in the markets in which it chooses to compete. and to maintain the No.

Identifying Options/Strategic Alternatives • Identify the alternatives available with the retailer to tap the market.  Market penetration  Market development  Retail format development  Diversification .

existing E X I S T I N G new Market dev/expansion •New market segments with existing formats •New customer base Retail Formats Market penetration •Increase basket size •Increase customers •Increase purchase frequency N E W Retail format dev. •New format to existing customers Diversification •New retail formats directed at new market segments Market segments .

– Keeping existing stores open for longer hours – Cross selling effort: • The practice of selling or suggesting related or complimentary products to a prospect or customer. .Market penetration • This strategy is adopted by a firm when it seeks to achieve growth with the existing products. or on increasing the frequency of purchase. • This strategy may focus either on: – Increasing the number of customer – Increasing the quantity purchased by the customers i:e the basket. in the market segments that it operates.

. this strategy involves: – Tapping new geographical markets or – Introducing products to the existing range that appeal to a wider audience. introducing a pharmacy in a super market. Thus. e.g.Market dev/expansion • A retailer is said to follow a strategy of market development if he reaches new market segments or completely changes the customer base.

who offer limited menus in smaller locations many a time inside large department stores .Retail format development • Developing a retail format is introducing a new retail format to the customers • Fast food retailers like McDonald’s and subway.

who has entered the business of apparel retail through its Wills Lifestyle.Diversification • The retailer grows by diversifying into new businesses by developing new products for new markets. • Tobacco giant ITC. .

Translation of mission statement into operational terms. and indicate the priorities of the Organisation. Give direction and set standards for the measurement of performance. Good objectives are measurable . Set objectives . Two important areas for retailers are • market performance • financial performance Ex: Sales volume targets Market share targets Retail expansion targets Profitability to be achieved Liquidity Return on investments Etc.are specific to time.

training.Obtain and allocate resources needed to compete Resource involve: Human Financial Physical facilities Recruiting. motivating personnel . selecting.

In order to be successful in segmenting the market. the retailer must ensure that it is: Measurable: is the segment measurable and identifiable? Accessible: will focusing marketing efforts on a particular market segment have a positive impact on eliciting the desired responses? Economically viable Stable: are the consumer characteristics stable indicators of the market potential .Develop the strategic plan Retailer determines the strategy by which he will achieve the objectives set forth. Positioning strategy. Choose the target market Determine the retail mix.

Evaluate and Control Effective positioning Every aspect of the store must be focused on target market Displays must appeal the target market Advertising must talk to it Etc.Implement the Strategy. .