8 Ways to Win in Retailing

K. Dasaratharaman
 Retail Concept (for multi brand Retail)

• Defines the following:

– Target Group
– Value Proposition
• Categories in which the TGs needs will be fulfilled
• Key differentiators:
– Range/ Assortment
– Quality
– Fashion status / newness
– Price
– Service
 Retail is a Catchment Business….
• Catchment Radius α Uniqueness of Concept
Luxury brands
Titan/ Fab India
F&G
Bata stores

Undifferentiated Concept vs Highly Differentiated Concept

 8 Ways to Win in Retail:
The Pentagon & Triangle Model
Place (Size, Location , Layout & Design)

Systems

Communication Product
- Positional - Style & Fashion
- Promotional - Intensity
- Range
- Assortment

Logistics Suppliers

Value (Price, Quality) People ( Service, Knowledge, Climate)

 Place
• Size = F{

• Location = F {

• Layout

• Design
 Place
• Size = F{ Retail Concept, Catchment Potential, Availability,
Cost , Location ……}

• Location = F { Retail Concept, Catchment Potential,

Availability, Cost, Size……….}

• Layout { Race Track, Grid, Boutique }

• Design {Retail concept, Creatives}

 Product
• Range = F{

• Assortment= F{

• Style & Fashion = F {

• Intensity = F {
 Product
• Range = F{ Retail concept, Space for the
category, Category strategy, Availability }

• Assortment= F{ do}

• Style & Fashion = F { Retail concept}

• Merchandise Intensity = F { 1/α Price Level}

Abercrombie & Fitch
 People
• Service = F {

• Knowledge = F {

• Climate
 People
• Service = F { α Price Level , Category
characteristics}

• Knowledge = F {α Service requirements}

• Organisational Climate = F{ above 2 factors}

Moments of Truth
A ‘Moment of Truth’ is any episode in which the customer comes into contact with
some aspect of your organization and gets an impression of the quality of its service.
Jan Carlzon, former President of Scandinavian Airlines has this to say:

“At SAS, we used to think of ourselves as the sum total of our aircraft, our maintenance
bases, our offices, and our administrative procedures. But, if you ask our customers
about SAS, they won’t tell you about our planes or our offices or the way we finance our
capital investments. Instead, they’ll talk about their experiences with the people at SAS.
SAS is not a collection of material assets but the quality of the contact between an
individual customer and the SAS employees who serve the customer directly.

Last year, each of the 10 million customers came in contact with approximately five
SAS employees and this contact lasted an average of 15 seconds at a time. Thus, SAS is
‘created’ 50 million times a year, 15 seconds at a time. These 50 million ‘moments of
truth’ are the moments that ultimately determine whether SAS will succeed or fail as a
company. They are the moments when we must prove to our customers that SAS is their
best alternative.”

Source: Moments of Truth - Jan Carlzon, President, Scandinavian Airlines

“People don’t want to communicate with an organization or a computer. They want to talk to
a real, live, responsive, responsible person who will listen and help them get satisfaction.” -
Theo Michelson
 Security
She
walks in
•Smile She pauses at
through
•Wish the entrance
the door
•Assist in before
baggage proceeding
POP
CSA/CSS

1.Smiles & 1. New Releases

Wishes She goes 2. Current offers
2. May I Help to a 3. New genres
You / Looking Section 4. Forthcoming
for events
something? 5. Store layout map
3. Gives a
basket

IF YES She is
interested
IF NO in 1. Smiles
something 2. Commends
particular her choice

Smiles and
3.Takes her to CSA/CSS
the section
says 4.Talks about
“ I’ll be CSA/CSS the music /
around in album
case you
need any
help”
 Value
• Price

• Quality

LVMH Video
Determinants of Customer Delivered Value
 Communication
• Positional

• Promotional

Johnny the Bagger….. Communication at its best

Pentagon elements - Place , Product, People,
Value and Communication

• These are aspects that are external facing for the Retailer
• These are the aspects that are Experienced by the Consumer.
• These are the aspects that will get compared by the Consumer
• These are all connected to Strategic Design of the Retail
format.
• Pentagon elements “ differentiate” the Retail format from
competitors.
• Need to DESIGN the strategies that will differentiate the Retail
Brand.
 Triangle elements – Systems , Logistics and
Suppliers
• These are aspects that are Internal facing for the
Retailer
• These are the aspects that have great impact on the
Pentagon aspects but are not seen by the Consumer.
• How well these aspects are designed and managed
result in Consumer experience and retail success.
• Triangle elements result in Cost Leadership
• These are all connected to Strategic Design of the
Retail format.
The Key questions for a New Retail brand

• Pentagon elements :
– What are our strategies?
– How Differentiated are they?
– How Sustainable are they?
– What COMPETENCIES do we need to Win?

• Triangle elements:
– What are our strategies?
– What COMPETENCIES do we need?
– How to make it sustainable?
 The 5 Key questions for each Pentagon and
Triangle Corner – for an ongoing Retail brand

• Do we Win?
• By How much? (a little or a lot)?
• Is it getting Better or Worse (direction )?
• Does anybody Care?
• Is it Sustainable?
LVMH -- The story behind the brand

Abercrombie & Fitch