This document discusses various aspects of retail strategy and planning. It identifies three basic types of retail locations: freestanding/isolated stores, businesses within districts/centers, and shopping centers. It also outlines five key elements of retail strategy: target market, retail format, bases for competitive advantage, approaches for building customer loyalty like unique positioning and services, and sources of sustainable advantage like location and loyal customers. Finally, it lists five characteristics of retailing and seven steps in the strategic planning process.

1. Table of Contents:
 Retail Location: Three basic types of retail location
Retail Market strategy
 Three important elements of retail strategy
 Ways of Building Loyalty
 Growth strategy
 Five characteristics of retailing
 Steps on strategic planning
Prepared by:
Priscilia P. Esto

2. Differentiate retailing and
retailer?
 Retailing – is the distribution process of retailer
getting the goods (either from the
manufacturer, wholesaler or agents ) and
selling them to the customers for the actual
use.
 Retailer- is a person or a business who sells
small quantities of goods to customers for the
actual use.

3. Retail Location:
3 basic types of retail location
Typically a store location maybe:
1. Freestanding/Isolated Store
2. Part of Business
District/Centers (unplanned
Business Districts)
3. Part of a Shopping Center
(Planned Shopping Centers)

4. 1. Free Standing/ Isolated store
Advantages:
 No competition
 Low costs
 Flexibility
 Better road and visibility
 Customization
 Easy parking

5. Disadvantages:
 Initial Difficulty in attracting
customers
 Most people like variety of
shopping
 Travel time
 Advertising costs
 Operating costs are not shared
 Unplanned and planned business
are preferred by customers

6. 2. Part of Business District/Centers
(unplanned Business Districts)
Advantages
 Excellent goods .service
assortment
 Variety of store types
 Wide range of prices
 Variety of customer services
 High level of pedestrian traffic
 Nearness to commercial or social
facilities

7. Disadvantages
 Inadequate parking
 Traffic congestion
 Travel time for sub urban
customers
 Aging retail facilities
 High rent and taxes

9. 3. Part of a shopping Center
( Planned Shopping Centers)_
Advantages
 Excellent goods/service
assortment for long term plan
 Strong sub urban population
 More appealing than city shopping
centers
 Lower theft rates
 Popularity of malls

10. Disadvantages
 Reduced operating
flexibility
 Higher rates
 Too many malls in an area
 Competitive environment
within malls

12. “Strategy” Is Over Used
PPT 5-12
Retailers Talk About A Lot of Different
“Strategies”
 Sales Strategy
 Advertising Strategy
 Merchandise Strategy
 Location Strategy
Strategy Is Not Just Another Term for
A Management Decision

13. Elements in Retail Strategy
• Target Market
Customer Needs
• Retail Format
Method for Satisfying Needs
• Bases for Building Sustainable Competitive Advantage
Defending Position Against Competitors
PPT 5-13

14. Examples of Retail Strategies
• Starbucks
• Target
• 7 Eleven
• Olive Garden
What is the target market, retail offering, and
source of competitive advantage for each
retailer?
PPT 5-14

15. Why Does a Retailer
Need to Focus on a
Specific Target Market?
Why Not Sell to
Everyone?
PPT 5-15

16. Methods for Segmenting Markets
Geographic
PPT 5-16
Lifestyle, Psychographics
Demographics
Buying Situations
Benefits Sought

17. Criteria For Selecting A Target Market
PPT 5-17
 Attractiveness --
Large, Growing,
Little Competition
More
Profits
 Consistent with Your
Competitive
Advantages

18. Can A Retailer Develop a Sustainable
Competitive Advantage by:






Dropping the Price of Your
Merchandise?
Building a Store at the Best
Location?
Deciding to Sell Some Hot
Merchandise?
Increasing Your Level of
Advertising?
Attracting Better Sales Associates by
Paying Higher Wages?
Providing Better Customer Service?
PPT 5-18

19. Internal and External Bases for Competitive
Advantage
Retail Firm
•Low Cost
•Large Size
•Efficient
Distribution,
Operations
• Unique
Knowledge
• Loyal Employees
Sources of
PPT 5-19
Capital
Vendors,
Suppliers Customers

20. Sources of Competitive Advantage
PPT 5-20
More Sustainable








Location
Customer Loyalty
Customer Service
Exclusive Merchandise
Low Cost Supply Chain
Management
Information Systems
Buying Power with
Vendors
Committed Employees
Less Sustainable
 Better Computers
 More Employees
 More Merchandise
 Greater Assortments
 Lower Prices
 More Advertising
 More Promotions
 Cleaner Stores

21. What does loyalty mean?
Is It the same as liking a store?
…Going to the store frequently?
PPT 5-21
Loyalty

22. Approaches for Building Customer Loyalty
PPT 5-22
Unique Positioning
Customer Service
Information About Customers (Database
Retailing)
Unique Merchandise
Location

23. Basis of Loyalty, Commitment
PPT 5-23
 Costs
Location
Frequent Shopper Programs
Unique Merchandise
 Mental, Emotional Attachment

24. Creating Store Loyalty
Mental and Emotional Attachments
PPT 5-24
 Elements in a Strong
Brand

 Top of the Mind
Awareness
Associations with
Brand/Store Name
 Methods Used to
Develop a Strong
Brand




Massive Exposure
Symbols to Reinforce
Image
Consistent
Positioning Creating
Strong Associations
Limited Brand
Extensions

25. Vendor Relationships
PPT 5-25
 Low Cost - Efficiency Through
Coordination
 Electronic Data Interchange (EDI)
 Collaborative Planning and Forecasting
to Reduce Inventory and Distribution
Costs
 Exclusive Sale of Desirable Brands
 Special Treatment
 Early Delivery of New Styles
 Shipment of Scare Merchandise

26. High Quality Customer Service
PPT 5-26
 Difficult to Achieve
 People Are Not Machines --
Inconsistent
 Retail Sales Associates At Bottom of
Labor Pool
 Goes Beyond Hiring Good People at High
Wages and Training Them --
Organizational Culture

27. Critical Tradeoff In Developing
Strategic Advantage
PPT 5-27
Focus Leads to Developing
A Competitive Advantage
But
Focus Reduces Flexibility
 Low Cost, Consistent Image, Vendor
Relationships Reduces Flexibility
 Similar to Dating and Marriage –
Commitment to a Relationship (Vendor)
Reduces Flexibility

28. Growth Opportunities
PPT 5-28
•Market Penetration
•Market Expansion
•Retail Format Development
•Diversification
- Related vs. Unrelated

29. Characteristics of Retailing
1.Marketing orientation
2. Multi-channel retailing
3. Innovative methods of thinking
and planning
4.Right environment
5. Unique characteristics of a
retailer

30. Steps in the Strategic
Retail Planning Process
1. Define the business mission
2. Conduct a situation audit:
Market attractiveness analysis
Competitor analysis
Self-analysis
3. Identify strategic opportunities
5. Establish specific objectives and allocate resources
7. Evaluate performance and make adjustments
6. Develop a retail mix to implement strategy
4. Evaluate strategic alternatives
PPT 5-30