RETAIL PLANNING

&
MANAGEMENT

CHAPTER 2
 LEARNING OBJECTIVES
‫مهم‬
• Why strategic retail planning is so important and
the components of strategic planning (i.e., the
mission statement; goals and objectives)
 SWOT analysis; and strategy.
‫عملية‬
• The retail planning process.
 WHAT IS STRATEGIC RETAIL PLANNI
NG?

‫يتضمن‬ ‫يتكيف‬ ‫موارد‬

• Involves adapting the resources of the

‫الفرص‬ ‫التهديدات‬

firm to the opportunities and threats of

an ever-changing retail environment.
 RETAIL PLANNING PROCESS

• In the retail planning process, a retailer decides

about the planning strategies of the retail business,
learn about the competition in the market, and
create and implement strategies accordingly.
• Retail planning is crucial for every retail business.
 ‫مكونات‬

COMPONENTS OF PLANNING?

‫تدخل‬
• Four components, or steps, involved in strategic planning:
1. Mission statement
2. Statement of goals and objectives
3. SWOT analysis
4. Strategy
 WHAT IS A MISSION STATEMENT?

‫وصف‬ ‫الطبيعة األساسية‬ ‫أسس منطقيه‬

• It’s a basic description of the fundamental nature, rationale, and direction of
the firm.
‫عناصر‬ ‫ضروريه‬
• Three elements necessary for a sound mission statement:
1. How the retailer uses or intends to use its resources
2. How it expects to relate to the ever-changing environment
3. The kinds of values it intends to provide in order to meet the needs and
wants of the consumer.
• Should be crafted at “the most meaningful level of generalization possible”…
why?
 GOALS AND OBJECTIVES

 Serve two general purposes:

1. Provide direction and guidance to the firm in the
formulation of its strategies.
• A [intermediate] “destination” for the firm
2. Establish a standard against which to measure and
evaluate future firm performance.
• They minimize the ability for ex post justification by a retail
manager
 ‫االداء‬

MARKET PERFORMANCE OBJECTIVES

• Establish the amount of dominance the retailer seeks in the

marketplace.
• Two most common measures are:
1. Sales volume
2. Market share
 Refers to the retailer’s total sales divided by total market sales
 Either at the level of the entire chain, geographic region, or product
market.
FINANCIAL PERFORMANCE OBJECTIVES

• Analyze a retailer’s ability to provide a profit level adequate to continue future

business.
• Two general categories:

1. Profitability objectives
• Deal directly with the monetary return the retailer desires from its business

2. Productivity objectives
• Deal directly with how much output the retailer desires for each unit of
resource input
 PRODUCTIVITY OBJECTIVES

• Three common measures:

1. Space productivity
2. Sales divided by total sq. feet of total retail selling space.
3. Labor productivity
• Sales divided by number of full-time-equivalent employees.
4. Merchandise productivity
• Sales divided by average Saudi Riyal investment in inventory at
cost).
 ‫مراحل‬

7 STAGES OF RETAIL PLANNING

• The planning process requires a thorough look into

the company's motives to determine what
strategies to implement. While it may be time-
consuming, drafting a detailed plan is essential for
successful execution.
• Retailers can begin by following seven general
steps-
 1. SET GOALS

• Businesses need to set specific short and long-term goals. Instead

of setting a general objective to increase sales, management should
set benchmarks regarding which product performances need to
improve, specific revenue goals, and ideal profit margins for each
item.
• Companies can further break down their goals into two categories-
• 1. Internal Objectives
• 2 . External Objectives
 1. SET GOALS; ……………CONTINUED

1. Internal Objectives
‫يجب‬ ‫سحب‬ ‫عملية‬
• Retail management should pull reports and set practical
‫بناء على‬

sales and revenue goals based on product performance.

‫شهري‬ ‫ريع سنوي‬
• Organizations can set clear monthly, quarterly, and
‫تحفيز‬
annual targets to motivate employees and keep them
‫الحفاظ‬
focused on boosting sales.
‫زيادة‬
 2. EXTERNAL OBJECTIVES

• External goals refer to a retailer's overall performance

according to customers and their experience.
• This can include customer service, retention, loyalty, and
product pricing.
• Companies should aim to create a personalized experience
that attracts and generates returning customers.
 2. ANALYZE THE MARKET

Once the company's objectives are clearly defined, it is

‫حالي‬
time to analyze the current market. Research can expose
competitors' strategies, performance, and weaknesses,
as well as consumer expectations.
This allows companies to develop a plan of action that
fulfills customer needs and stands apart from the
competition.
 ‫سلوك‬
3. ANALYZE CUSTOMER BEHAVIOR

• If a company does not understand their target audience, they

cannot correctly launch and promote products to attract customers.
Therefore, retailers need to understand what consumers expect
from products and brands.
• First, companies must understand what types of demographics are
in the market for their products.
• However, retailers should continuously monitor customer
feedback and preference to avoid becoming irrelevant or stagnant.
 4. OUTLINE RETAIL STRATEGIES

• After determining target demographics, marketing teams can begin

developing effective promotions for their products and company
identity. The retailer must establish a positive image that not only
attracts customers but accurately illustrates what they can expect as
well.
• However, businesses must stay up to date with current market
trends as they are ever-evolving. Without access to current metrics,
marketing strategies can become ineffective.
 5. MAKE SHORT-TERM PLANS

• Based on the company's short-term goals, management

needs to outline a step-by-step plan to achieve key metrics.
For example, if an organization wants to improve its sales
during the Hajj or Ramadan season, it must focus on
targeted marketing tactics and floor design to increase
traffic flow.
• This can include running digital campaigns, commercials,
and exclusive deals.
 5. MAKE SHORT-TERM PLANS

• Management can also redesign the storefront and layout

design to attract shoppers passing by.
• However, retailers should begin the planning process
months in advance to ensure all resources are properly
allocated. Otherwise, businesses may lack sufficient
funds to supplement plans due to poor organization
 6. IMPLEMENT STRATEGIES

• Once the market and customers have been analyzed, goals

have been set, and plans are outlined, companies can
begin implementing their strategies.
• Management should understand that some methods might
require additional changes to the business model, staffing,
accounting, or supply chain. These alterations may be met
with employee reluctance, as they may have to handle
more responsibilities.
 6. IMPLEMENT STRATEGIES

• However, with successful planning, staff can ease into

their new roles to avoid overwhelming team members.
• Companies should consider offering incentives and
bonuses if the employees adapt well and the strategies
improve work performance.
 7. ANALYZE THE RETAIL STRATEGY
PERFORMANCE

• Once the methods are implemented, organizations must

continuously monitor performance to ensure
improvements are consistent. The regulation also helps
identify any errors within a process so management can
quickly reconcile any damages.
• Companies can also take note of the strengths and
weaknesses to streamline future planning.
 7. ANALYZE THE RETAIL STRATEGY
PERFORMANCE
• Retail planning is vital for defining business objectives
and maintaining a foothold in a competitive market.
Without a detailed plan, retailers can exhaust time and
resources on ineffective marketing tactics.
• A comprehensive retail plan ensures that employees are
working in unison to provide the best service, products,
and experience, boosting company revenue.
• In order for businesses to control inventory, implement
marketing campaigns, and manage the supply chain, they need
retail planning strategies. Retail management cannot
adequately promote products and define merchandise
assortment without a detailed plan that outlines the four W's-
1. What to sell

2. When to sell

3. Where to sell

4. Who to sell to
 SWOT ANALYSIS

• Strengths:
1. What major competitive advantage(s) do we have?
2. What are we good at?
3. What do customers perceive as our strong points?
 SWOT ANALYSIS

• Weaknesses
1. What major competitive advantage(s) do competitors
have over us?
2. What are competitors better at than we are?
3. What are our major internal weaknesses?
 SWOT ANALYSIS

• Threats
1. What unfortunate environmental trends may hurt
our future performance?
2. What technology is on the horizon that may soon
have an impact on our firm?
 OPPORTUNITY

• What are the opportunities available in the

market.
 HOMEWORK
• 1. Define seven steps of Retail planning in detail
with citing some examples.
•Thank You