Recent Trends in Canadian Retail Increased globalization New store formats and locations Increased use of technology Channel blurring Changing.

Recent Trends in Canadian Retail Increased globalization New store formats and locations Increased use of technology Channel blurring Changing consumer behaviour

Special Characteristics Small average sales Impulse purchases Popularity of stores

Chapter 33Strategic Planning in Retailing

RETAIL MANAGEMENT:

A STRATEGICAPPROACH,

Class Agenda Discuss retail strategy and apply concepts to a

short case

How Retail Institutions are Evolving

Mergers, Diversification, Downsizing Cost-Containment and Value-Driven

Retailing

Figure 5.1 The Wheel of Retailing

Figure 5.3 Scrambled Merchandising by a Shoe Store

Figure 5.4 Retail Life Cycle

Figure 1.10 Applying the Retail Concept

Customer Orientation

Coordinated Effort

Value driven

Goal Orientation

RetailingConcept

RetailStrategy

Benefits of Strategic Retail Planning

Opportunity for analysis Direction Coordination of the firm’s total efforts Identify points of differentiation Appeal to a group of customers Anticipation and avoidance of crises

Figure 3.1 Elements of a Retail Strategy

Sobey’s Inc. Canada

Goals: Sales growth between 6 and 8 percent Operating earnings per share growth between

12 and 16 percent Companywide capital expenditures of

approximately $550 million to $600 million National share of requirements of 20 percent Maintenance of first-quarter supplier rating

Positioning Approaches Mass merchandising is a positioning approach

whereby retailers offer a discount or value-oriented image, a wide or deep merchandise selection, and large store facilities

Niche retailing occurs when retailers identify specific customer segments and deploy unique strategies to address the desires of those segments rather than the mass market

Figure 3.7 Selected Retail Positioning Strategies

Target Market Identification Three techniques

Mass marketing Concentrated marketing Differentiated marketing

See Table 3-3 for a detailed comparison

The Positioning Approach of High-End Jewellery Stores

Case #4, p. 74

The Positioning Approach of High-End Jewellery Stores

1. Positioning Chart – Jewellers

2. Blurred positioning?

3. Pros and cons of Tiffany’s low price strategy

4. How would you expect the total retail experience to differ in Wal-Mart, department stores and high-end retailers?

“It is critical … for a retailer to choose his or her spots…to accept the notion that you can’t be everything to everyone.”

- Kevin Coupe, Morningnewsbeat.com

Overall Strategy Components

The Retailing Strategy Mix is a combination of: Product Price Location Communication Operations Management

Need to balance with uncontrollable environmental and marketplace factors

Controllable Factors

Wal-Mart Watch the Wal-Mart video and consider the elements of its

strategy. What does Wal-Mart do well? Is Wal-Mart the perfect retailer?

Some interesting Wal-Mart sources: http://walmart.feedroom.com/ifr_main.jsp?nsid=a-653ba03d:10d9dd

55f38:-741f&fr_story=de9a09508999541804d6a74118c1601074156570&st=1157994113989&mp=WMP&cpf=true&fr=060806_015729_wcf39d2dx10bb4c7cfaexw6ebb&rdm=2762.328875758835

http://www.walmartfacts.com/FactSheets/ http://www.pbs.org/itvs/storewars/story.html

Retail Growth StrategiesExisting

Existing

New

New

Market Segment

Retail Format

Market Penetration

Retail Format Development

Diversification

Market Development

Consider Home Depot Growth Classify the type of growth strategies

employed by Home Depot through: Home Depot Canada

Multiple store openings in one market New stores opening in previously unserved markets Smaller version stores for higher-end urban customers

Launch of their Canadian website Expo Design Center

Market penetrationMarket development

DiversificationRetail Format Dev.

Diversification

Takeaways Developing a successful retail strategy requires:

Careful analysis and planning Balancing controllable and uncontrollable

variables Accurately defining target market(s) and

satisfying their needs and wants Understanding your position in the market Coordinated effort

A retailer can become a _____ through low prices, specialized products, a large selection, and superb customer service.

a. destination retailer

b. relationship retailer

c. parasite store

d. value-based retailer

Q10

What is a parasite store?

Earning Destination Retailer Status

Be price oriented and cost efficient Be upscale Be convenient Offer a dominant assortment Offer superior customer service Be innovative or exclusive

Figure 3.1 Elements of a Retail Strategy

Overall Strategy Components

The Retailing Strategy Mix is a combination of: Product Price Location Communication Operations Management

Need to balance with uncontrollable environmental and marketplace factors

Controllable Factors

Benefits of Strategic Retail Planning

Opportunity for analysis Direction Coordination of the firm’s total efforts Identify points of differentiation Appeal to a group of customers Anticipation and avoidance of crises

How does Wal-Mart plan to grow?

Retail Growth StrategiesExisting

Existing

New

New

Market Segment

Retail Format

Market Penetration

Retail Format Development

Diversification

Market Development

Takeaways Developing a successful retail strategy requires:

Careful analysis and planning Balancing controllable and uncontrollable

variables Accurately defining target market(s) and

satisfying their needs and wants Understanding your position in the market Coordinated effort