How to Create a Strategic Plan
Looking for a way to take your company in a new and profitable direction? It starts with strategic planning. Keep reading to learn what a strategic plan is, why you need it and how you can strategically create one.
When it comes to business and finance, strategic planning will help you allocate your resources, energy and assets. When implemented, a strategic plan will begin to move your operations in a more profitable direction. The primary goal of the plan is to ensure you and any other stakeholders are on the same page and striving to reach the same goal.
Creating a strategic plan requires a disciplined effort. Once you put the plan into action, it will influence the segment of customers that you target, how you serve those customers and the experience those customers have.
Assess the Current Infrastructure and Operations
The first step in creating a strategic plan is to carefully assess your existing infrastructure and operations. You can do this through a SWOT analysis, which is an analysis of the company’s strengths, weaknesses, opportunities and threats. The goal here is to pinpoint the resources that you use to carry out your day-to-day operations, to look at your monthly revenue patterns, to list any company challenges related to the customer experience and, most importantly, to look at your marketing methods and ways to improve the overall customer experience.
Creation of Mission Statement and Objectives
The next step is to create a mission statement. You may already have one, but it’s important to note your mission at the top of the strategic plan document you create. This ensures everyone is focused on the same goal. Your mission statement should cover why you started the company and what you intend to accomplish through the products and services that you offer.
In addition to the mission statement, make sure to outline both short- and long-term objectives. List the objectives according to their priority and designate certain managers or employees to be responsible for each one. Also, jot down the resources that will be used to achieve each objective.
Now that you know what you’re trying to achieve and who is responsible for each goal, it’s time to deploy the plan and measure its progress. A weekly meeting is extremely important for all managers and stakeholders provide feedback. Your goal is to determine if the company is headed in the right direction. If not, you’ll need to revise the strategic plan accordingly.
Strategic Plans Are Ongoing
Once your strategic plan helps you achieve several objectives, it’s smart to regroup and set new objectives. As your company grows, you can set new goals to ensure the company keeps moving forward. You can share the success of your strategic plan with potential investors as a way to tap into new capital funding.
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7 Stages of Strategic Retail Planning Process for Higher Efficiency
Achieving any objective requires a strategic plan, which can be tricky and often confusing for beginners. It’s just like you have a blank canvas, you know the output, but you don’t where to start.
If you are an entrepreneur who frequently gets stuck on questions like:
- What are we as a business doing?
- Shall we continue doing it or should make changes in our strategies?
- What factors are impacting our business?
- Are we prepared to face challenges in the future?
Then you have landed at the right place!
Here, in this article, we’ll be discussing strategic retail planning for your business.
Table of Contents
What Is Strategic Planning in Retailing?
So, let’s begin by understanding what strategic planning in retailing actually means.
In a strategic retail planning process, a business identifies and sets its goals for a definite period and prepares a strategic plan to achieve them efficiently. The right strategic plan will help you bridge the gap between where you are right now and where you want to be.
This determines the first step of the strategic retail planning process: Defining Goals
7 Steps in Strategic Retail Planning Process
1. Self-Analysis to Define SMART Goals
The journey of the strategic retail planning process starts with self-analysis to understand that where your business stands right now. After having a clear picture of where you are currently you need to focus on where you want to reach, i.e., set clear goals for your business.
You can begin by defining micro-goals for each department and then macro-goals for the business as a whole. Ensure that whatever goals you set, whether micro or macro, must be SMART;
- T- Time-bound.
Setting SMART goals will ensure that all your teams are focused on achieving realistic and measurable goals. For example, increasing sales in the last quarter by 7%. This has a measurable target to be achieved in a definite period of time.
2. Conducting Market Analysis
Conducting market analysis means analyzing your competitors, their products, marketing strategies, shortcomings, customer satisfaction rate, and so on. It will help you in bridging the gap between customers’ expectations and the products available in the market.
Moreover, market analysis will help you understand the market demographics, current trends, and customer segmentation. This will help you in analyzing any risks or opportunities and preparing for them.
3. Understand Your Consumer Behavior
Getting insights into your consumer behavior will give you clarity of their preferences, buying patterns, and spending habits. It will ensure that you attract the right pool of people to your business. Consumer analysis will help you in understanding them better, their needs, their expectations, and different influential factors behind their purchasing decisions. This way, you can design a customized marketing campaign that will ensure market penetration.
Customer analysis can be done by conducting a SWOT analysis to understand strengths, weaknesses, opportunities, and threats.
4. Design Your Retail Strategies
Now that you have thoroughly understood the market and your customers, it’s time to design and implement your retail strategies to achieve SMART goals. While designing your next retail strategy, consider your retail positioning, whether you want to continue with the same market positioning or create a new customer base.
Your retail strategy should not only focus on attracting a maximum number of prospects to your business but also to provide clarity of what they expect. The main source of attraction can be competitive pricing, quality, distinct features, WOW experience, or anything that is your brand’s USP.
Check Out: The Best Retail Management Software for an Effective Retail Growth
5. Focus on Short-Term Strategic Plans
Now when you have your long-term strategy in front of you, break it into small, short-term actionable strategic plans. For example, it’s Christmas time and now you can divert everything from your store’s look and feel to your digital campaigns towards the same theme and then announce festive offers. Although it may just elevate your sales for the festive season, as a whole it will contribute to your annual sales.
Another benefit of implementing short-term strategic plans is that you can test-fire for your long-term strategic plan. If you find any loopholes in meeting customer expectations, they can be immediately rectified.
6. Finally! Implement the Strategies
After having a successful test run with short-term strategies, it’s finally time to implement the strategic retail growth plan.
But this will not be a cakewalk!
Employees may be reluctant to adopt new methods and technologies, but with the right training and counseling, it can all be done. Offering incentives, bonuses, and additional benefits can help in overcoming reluctance and even encourage them to take up new roles and responsibilities with enthusiasm.
7. Analyze the Performance of Your Strategies
Retail strategies may or may not always churn out the expected results.
It is imperative that implemented retail strategies should be keenly monitored at regular intervals. If any errors or difficulties are found, then they should be rectified on time. Analyzing the performance will also help you in preparing for future strategies and not repeating the same mistakes.
Importance of Strategic Retail Planning
So, do you think every business should strategize retail planning?
The answer is YES!
Strategic planning for a retail business is highly imperative to keep the business and organizational activities clear and focused towards SMART goals.
Along with this, strategic retail planning offers you financial benefits, where you strategize, study your market and consumers, and ensure that you invest your resources efficiently. It provides you an edge over your competitors. It helps recognize their shortcomings and fill market gaps with your products. It gives a reality check of what consumers want.
Moreover, strategic retail planning helps you prepare for the future and practice risk management for uncertain times.
Suggested Read: 10 Grocery POS Software for Your Retail Business
Some of the best examples are examples of strategic retail planning are creating a festive-themed storefront, designing a social media campaign to promote discounts that drive your potential customers to the store. Other examples are training your employees to adapt to new technologies and strategies.
Running online campaigns on different social media campaigns and Goggle can be an example of a strategic planning process for global retailing.
7 major steps involved in developing retail strategy: 1) Identify your Objectives 2) Analyze your Market 3) Understand your customer 4) Plan Retail Strategies 5) Focus on Short-Term Strategic Plans 6) Implement the Strategies 7) Analyze your Performance
Retail planning is important to have clarity about business goals that helps other teams to work dedicatedly in achieving the desired outcome.
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What is Retail Planning? How to Navigate Planning in Retail (and Why It’s Important)
By Rachel Hand Published on September 23, 2022 Last updated on August 14, 2023
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Table of Contents
What is retail planning?
What steps are involved in retail planning, 6 steps to create a strategic retail plan, shipbob takes the legwork out of retail planning, retail planning faqs.
The success of a retail business relies on having the right products available at the right time and place.
To do so, having a solid retail planning strategy is key. Before you launch an online business and sell products, you need a plan of action first if you want to make profit.
In this article, we’ll break down the steps of proper retail planning, why it’s important, and how ShipBob can help with the “logistics” side when it’s time to execute.
Retail planning is the process of developing a strategy for retailers to meet customer demand while maximizing ROI using data and other resources.
Taking the time to plan ensures businesses have the right amount of inventory available to meet demand while minimizing risk of having too much inventory tied into capital.
It also involves pricing and observing competition to ensure products are priced right and are delivered quickly and affordably to meet customer expectations.
Why is strategic retail planning important?
47% of consumers are willing to pay more for an exceptional customer experience.
Strategic retail planning is crucial if you want to consistently meet consumer demand and deliver a great experience.
On the flip side, the same number of consumers would be willing to switch to a different brand or retailer after a frustrating experience. This frustration could result from issues like stockouts, delivery delays, and high prices.
Take for example, how Montgomery Ward had to shut its doors after 128 years in business. The store was struggling to survive in a highly competitive market without anything distinctive to offer.
While there were many factors leading to the demise of the retail chain, the renowned retail brand failed to stock the right kinds of inventory that was in demand.
Strategic retail planning helps retailers stay competitive and foresee challenges and risks, so they can adjust their retail strategy accordingly to meet demand and stay relevant.
There is a lot that goes into retailing planning, but here, we break down the steps into three main major phases.
Merchandise financial planning (MFP)
First, you start by mapping your financial goals against your retail procurement and sales strategy, which is known as “merchandise financial planning (MFP).”
Merchandise financial planning involves sourcing and buying products your customers want to buy, then pricing and distributing them strategically to yield maximum returns on investment.
Financial planning helps to optimize your inventory investment to satisfy consumer demand while preventing excess stock. With careful financial planning, you’re spending your money only to procure the inventory you need in a given period of time to meet demand.
Next, you put the above process into action by deploying a sales strategy that allows you to meet your financial goals. This stage is all about coming up with a plan to sell inventory and turn it into profit.
Sales planning involves accurate demand forecasting , so you can project the amount of inventory that will be sold in a given period of time. It also involves SKU management and deciding what SKUs will sell and which SKUs might be slower moving.
The best way to plan for sales is to look at your competition, research customer buying behavior and trends, and look into historical order data.
Finally, you have the inventory planning process, which involves optimizing your inventory to meet demand and optimize internal costs.
Inventory planning consists of understanding what SKUs perform the best through multiple channels, such as location and sales channels (social media and through other retailers).
For example, if you sell summer apparel, you’ll want to consider where to store the most amount of inventory based on seasonality. You most likely would sell more inventory throughout the year in warmer climates (like California or Florida), then in the Midwest year round.
Considering the key role it plays in ensuring customer satisfaction and boosting your bottom line, a strategic retail plan is crucial for your business.
Here, we break down the six steps to take before execution.
Step 1: Assess the market
A solid understanding of the current market is one of the first steps in retail planning.
By seeing what’s out there in the market and what your competitors are doing, you can better assess where you stand and develop a plan of action.
The SWOT analysis method is a great way to see exactly what challenges and opportunities exist. This involves identifying the strengths, weaknesses, opportunities, and threats when analyzing your competitors, so you can find your unique space in the marketplace.
For example, your competitor’s strengths may include product quality and exceptional customer service. They may also have a strong reputation that contributes to better recognizability and brand trust.
Meanwhile, their weaknesses may include the lack of multiple payment options. They may also be selling only through a couple of sales channels, which could make their products less accessible to some consumers.
As for opportunities , you may identify internal ones, such as the use of automation to streamline your processes or the opportunity to expand into multiple fulfillment locations to deliver orders to customers faster.
Threats may be in the form of competitors offering faster and more affordable shipping options. It may also involve disruptions in the supply chain, such as a shortage of raw materials, due to new legislature affecting imports and exports — which impacts the entire market.
Closely analyzing all these factors will help you identify ways to strengthen your retail operations and get ahead of the competition.
Step 2: Understand customer behavior
Without a proper understanding of your target audience, you won’t know which products to sell or how to sell them.
A thorough analysis of customer behavior is essential to understand their needs, pain points, preferences, and motivations.
Some questions to consider include:
- Are you selling the products customers want?
- Can customers buy your products through the sales channels they prefer?
- Are you offering desirable shipping options, such as free or 2-day shipping ?
Ideally, you should employ both quantitative and qualitative research methods to get a 360-degree view of your customer behavior. You could conduct surveys, collect feedback, use online analytics tools, look at historical data, or work with focus groups.
For example, the brand Innocent Drinks was receiving complaints about having too many banana-based smoothies. The brand listened and came up with a new banana-less smoothie to cater to the demands of customers who still wanted to buy their drinks but craved variety.
If you’re constantly stocking up on items that you assume your customers would like without understanding what they do like, you could face a risk of becoming irrelevant in the market and accumulating unsellable inventory.
Step 4: Set objectives
What gets measured gets managed.
When business objectives are defined, your team will be on the same page in terms of what success looks like for the business.
Make sure to get as specific as possible when creating goals. That means you want to avoid generic objectives. To do so, refer to the SMART goal setting model:
- Specific : It should answer questions like what you need to accomplish and who is responsible for it. For example, your goal may be for the sales department to close 30% more sales compared to the previous quarter instead of just aiming to “increase sales.”
- Measurable : Your goal should be quantifiable by having a specific number to work toward. For example, you may aim to drive 1,000 new signups for your product by the end of the quarter.
- Achievable : It should also be realistic enough to achieve. Consider whether you have the time and resources to accomplish the goal. For example, a 15% revenue growth may be more realistic to achieve than a 50% revenue growth considering the lack of resources.
- Relevant : Your goal should also make sense considering your bottom line. For example, a 10% increase in sales will significantly contribute to your revenue growth.
- Time-bound : Make sure you specify the timeline by which the goal should be achieved. For example, you may aim to achieve the goal by the end of the current quarter or within two months’ time.
Step 5: Create and implement strategies
Creating and implementing your retail plan can be extremely time-consuming and challenging because there are many moving parts involved.
Before implementing the strategy, be sure to carefully consider factors such as product type range, pricing, placement, marketing and advertising spend, and staffing, among many others.
You’ll need to pay extra close attention to your merchandising strategy ideas as you need to offer the right assortment of products to appeal to your audience. Perhaps you want to specialize in a small variety of high-end products to maintain exclusivity.
Or maybe you want to keep your merchandising mix broad to appeal to a wider variety of buyers. Regardless, it’s important to be strategic with your decision.
For example, as one of the largest footwear retailers in the market, Zappos has an expansive footwear merchandising mix. Their customers can choose from hundreds of thousands of options in multiple categories and from hundreds of brands.
Additionally, your pricing strategy should be carefully planned to help you drive more profits. Apple’s pricing ladder , for example, is well optimized to maximize revenue. If you opt to spend an extra $X to increase your storage, now you’re only another extra $Y away from a superior device.
Step 6: Monitor performance and iterate accordingly
Finally, once your retail plan has been implemented, it’s time to keep track of performance to see how well the plan is working.
Be on the lookout for any errors or optimization opportunities, so you can quickly take action. Similarly, identify what’s working, so you can incorporate it into your future retail planning.
Real-time data access and inventory analytics are crucial parts of this step.
Monitoring inventory levels in real time will help you keep track of stockouts, improve inventory efficacy, and adjust inventory levels as needed.
ShipBob’s analytics are a huge bonus for a merchant looking to partner with a single 3PL that has a built-in order management tool. I was so stoked about being able to see the optimized layout of where you should be distributing your inventory is great. Having inventory and warehouse management capabilities built into your 3PL is such a value-add, especially for smaller companies.” Juliana Brasil, Director of Operations at Food Huggers
ShipBob is an omnichannel fulfillment provider with a global fulfillment network, powered by a centralized proprietary platform for real-time inventory tracking , order management, SKU managemen t, and much more.
When it comes to retail planning, ShipBob can help you execute by providing retail fulfillment expertise and retail distribution resources, such as fulfillment capabilities and inventory management data.
ShipBob’s fulfillment platform makes it easy to track inventory flow as it moves through the retail supply chain . It closely monitors demand data and inventory levels, so you have data to make better decisions on inventory replenishment and distribution.
Off the bat, I liked that I would be able to control multiple warehouses through one page with ShipBob. With my old 3PL, I could never just open a page and get the info I wanted. I had to click several times, then export it, and try to make sense of it. ShipBob lets you manage your inventory while providing important data in a very digestible way.” Wes Brown, Head of Operations at Black Claw LLC
To learn more about how ShipBob can help you with logistics planning , click the button below for more information and to request custom pricing.
Below are answers to the most common questions about retail planning.
What are the four Ps in retail?
The four Ps in retail are product, price, place, and promotion.
What are common retail challenges?
Some of the most common retail challenges include attracting new customers, keeping up with changing consumer demand, keeping an eye on competition, and retaining existing customers.
How are retailers transforming in 2022?
In 2022, retailers are undergoing a supply chain transformation that digitizes logistics and makes it easier to sell across channels to reach more customers.
Rachel is a Content Marketing Specialist at ShipBob, where she writes blog articles, eGuides, and other resources to help small business owners master their logistics.
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Strategic Retail Planning Process: The Right Way To Do It
Get ready to chart a new course in the retail industry! The waters are rough, with economic uncertainty, consumer expectations shifting, and game-changing megatrends like e-commerce, sustainability, and digitalization shaking up established business models.
The traditional approach to strategic planning is no longer enough to steer you to success. But don’t get discouraged just yet!
In this article, we'll explore why the usual approach is falling short and reveal a proven, highly effective 6-step retail strategic planning process. We’ll show you a real-world example of a strategic plan from one of the largest global retailers.
We'll also arm you with a comprehensive retail strategic plan template to help you create and execute a winning strategy that will gain your organization a competitive advantage and unlock growth potential.
Here’s what we’re going to cover:
Why the Traditional Approach to Strategic Planning in Retail Falls Short
- 6 Steps of Highly Effective Strategic Retail Planning
- Retail Strategic Plan Example + Template
- The Key to Retail Success in 2023: An Execution-Ready Strategic Plan
Today's retail market demands a different approach to strategic planning, as long-term planning cycles and spreadsheets are no longer effective. This traditional approach is disconnected from day-to-day operations and business leaders focus too much on planning and perfecting their strategies instead of executing them. As a result, their strategies are bound to fail before they even hit the ground.
- Dynamic market conditions and global supply chain disruptions: The retail industry is constantly changing, making it hard to stick to a long-term plan.
- Digitalization and technology disruptions: Digital transformation requires quick action and rapid adaptation across all levels of the organization, but the traditional approach can’t break through organizational siloes and keep up with the pace of change.
- Increased consumer expectations: With customers' expectations constantly shifting, relying on the slow and rigid approach to strategic planning can result in a market share loss.
These factors highlight the need for a more flexible, adaptable approach to the strategic retail planning process and retail operating model. By adopting an execution-first mindset, data-driven, and flexible approach to retail strategy, retailers can accelerate their digital transformation , stay ahead of the competition and deliver profitable growth.
📚 Recommended read: Strategy study: How Costco's Unique Business Model Resulted In Global Success
6 Steps of Highly Effective Strategic Retail Planning
In the steps below, you’ll discover how to develop a retail strategy on a corporate level, connect the dots between strategy and day-to-day execution, and integrate fast adaptability into your retail operations.
Let's unpack how you can get it right:
1. Start with a situational analysis
The first step of effective strategic retail planning is conducting a thorough situational analysis. This strategic analysis involves evaluating both internal and external factors that may impact your retail business.
One useful tool in this process is a SWOT analysis , which evaluates the strengths, weaknesses, opportunities, and threats of your retail business.
The internal analysis should look closely at your company's strengths and weaknesses, while the external analysis should examine the opportunities and threats in the competitive landscape , economic conditions, industry trends, and broader market forces.
You can also take advantage of other analysis tools for a more in-depth analysis of the external environment, such as PESTLE analysis or Porter’s 5 Forces .
💡Here's a pro tip: Even if you’re planning at a corporate level, you shouldn’t neglect your key stakeholders in this step. These people will be responsible for bringing your retail business strategy to life, so it's important to get their input. Here are some examples:
- Your retail marketing team will tell you more about your competitors, market segmentation, and target market demographics. Plus, they should give you insight into which growth and marketing strategies are best for different target markets.
- Your merchandise management team can give you insights into merchandise planning and pricing strategies that work best to maximize turnovers.
On top of that, when they're a part of the process, they'll feel more invested in making your strategy a success.
📚 Recommended read: How To Effectively Co-create Strategy At Your Organization (Recap of the workshop led by Ilana Rosen, Director of Strategy at Old Navy)
2. Get insights from your consumers
Consumer-centric strategies are one of the key factors in securing a successful retail business. Did you know that companies can reduce operational costs by 10 to 25 percent as a result of improved customer experience and digital transformation? That's why it's important to get insights from your consumers.
Your goal needs to be to have a complete, 360 view of your consumer. You can start by looking at demographics. What’s your target audience? What are their backgrounds, habits, and motivations? What does their typical customer journey look like?
By informing your retail strategy with consumer insights, you’ll be able to ground your strategy in data and set your business up for success. Let’s look at Nike , for example. They realized that a large portion of their customers were young athletes who wanted more from their gear to enhance their performance. This insight led to the creation of Nike's innovative "Dri-Fit" line, which has become a staple for athletes around the world.
By conducting a comprehensive consumer behavior analysis, you will gain a better understanding of consumer behavior and their needs. With these insights, you can then identify areas for improvement, innovation, and strategic opportunities for growth.
📚 Recommended read: How Nike Runs The Sportswear Game
3. Develop an overarching retail strategy, set objectives, and build a roadmap
In the second step of effective strategic retail planning, you'll want to outline general business intent, formulate your overarching retail strategy and build a strategic roadmap. This includes defining your strategic priorities and key retail objectives, and determining the measures of success.
To help you with this process, you may find it helpful to use a strategic plan template, such as this one → Retail Strategy Template by Cascade .
To create a robust strategy and roadmap, there are several key elements that you should include:
🔎Focus areas: Outline the specific areas of the business that your strategy will focus on. For example, a focus area for a retail business might be boosting digital growth, improving customer experience in-store, expanding into new markets, elevating customer omnichannel experience, or enhancing inventory management.
📌Key Retail Objectives: Define specific, measurable, time-bound, and achievable objectives for each strategic focus area. For example, increasing customer satisfaction by 10% in the next 12 months, or launching a new e-commerce platform within the next six months.
📈Measures of Success: This defines how the success of your strategies will be evaluated. For example, a KPI (Key Performance Indicator) for a retail business might be customer satisfaction scores, the number of active loyalty customers, market share, or online sales growth.
📤Action Plan: Break the overall strategic plan down into smaller, short-term, and specific actions or projects you need to take to achieve your long-term objectives and prioritize the most critical initiatives. This might include launching a new mobile app, investing in a new CRM system, hiring additional staff, improving on-shelf availability, or training employees on customer service.
📅Timelines: Establish deadlines for key milestones and deliverables to ensure you stay on track and meet your objectives.
😎Owners: Identify who will be responsible for executing each aspect of the strategy. This could include anyone from your senior management or division managers.
💰 Budget: Allocate financial resources that will be required to implement strategies and keep track of the budget spent.
By including these key elements in your retail planning strategy and roadmap, you'll have a clear understanding of where you want to take your business and how you'll get there. The roadmap will serve as a guiding principle as you move forward with the rest of your strategic planning process and strategy execution.
👉 Here’s how Cascade can help you in this step:
With Cascade’s strategic planning feature , you'll have a clear, visual representation of your strategic plan and roadmap, making it easy to see how each aspect of your strategy fits together and how you're progressing toward your goals.
Say goodbye to confusing and complex spreadsheets - with Cascade, you'll have all the information you need in one place. And, the best part? It's not just a pretty picture - Cascade helps you track progress and measure success, ensuring that you're always on the right track to achieving your retail objectives.
4. Align retail operations with the overarching business strategy
Step three is all about getting your people on board! Sharing the company strategy with your teams is crucial. Not only does it give them a clear understanding of what the big picture looks like, but it also helps ensure their daily efforts are connected to corporate goals.
However, one of the key problems in the goal-setting process , especially in larger, complex, and multinational organizations, is that it can become "opaque — with clarity diminishing" as goals are passed down through the hierarchy, according to the report Reimagining Performance Management from AICPA & CIMA and the World Business Council for Sustainable Development.
With Cascade, it's easy to cascade corporate goals and make sure everyone's focused on the right strategic initiatives to keep the business moving forward and delivering on the corporate strategy.
👉 Here’s how Cascade can help you:
With Cascade, you can easily link strategic objectives to individual business unit plans or departmental plans, so you and your teams can see the direct connection between their initiatives and their impact on corporate goals.
Plus, it makes communication and cross-collaboration between teams a breeze, so everyone is always in sync. Say goodbye to misaligned efforts and hello to a seamless, aligned strategy execution with Cascade.
5. Time to execute your retail strategic plan!
The fifth step is all about putting your plan into action! It's time to stop just talking the talk, and start walking the walk. You've developed a fantastic retail strategy, now it's time to share it with the world (or at least, your organization). Make sure everyone understands your overarching retail business strategy and how it fits into the bigger picture. Here are some tips to help you communicate it effectively:
- Make it accessible: Don't hide your strategy in a dusty PowerPoint presentation; make sure it's available in one easily accessible place for everyone in the organization. This will help you to keep strategy relevant and alive throughout the execution phase.
- Lead by example: As a leader, you should set the tone and lead by example. Encourage everyone to take ownership of the strategy and be proactive in its execution.
- Use different communication channels: Different people prefer different communication styles, so make sure to use a variety of channels. Ankur Gupta, Principal of the Strategic Planning Office at FedEx, suggests regular town halls and announcements from the senior leadership. Try intranet sites, regular meetings, and daily standups. Or personally visit the company’s retail stores. This will help you to build trust with store managers and frontline workers and get buy-in into what needs to be done to successfully execute your strategy.
By following these tips, you'll be well on your way to executing your retail strategy and achieving your goals!
Cascade creates a centralized place for your strategy and is easily accessible to everyone who needs to be involved in strategy execution. Plus, you can manage your organization's strategy in a secure hub, allowing only those with permission to access sensitive information.
6. Monitor and adapt as you go
In this final step of the strategic retail planning process, it's crucial to have an effective performance management system in place to monitor progress, analyze performance, and make data-driven decisions. The goal is to make sure the retail business stays on track to achieve its objectives and to make quick adjustments along the way.
Here’s what you should do in this step to ensure successful strategy execution:
- Move beyond manual reporting: Many retailers rely on manual methods of compiling reports, which can be time-consuming and result in missed opportunities. To access sales performance, cost, and profitability information in real-time, it's essential to embrace automation and end-to-end visibility in the strategic retail planning process and its execution.
- Establish an effective performance management system: Regular quarterly reviews, scheduled progress reports, a rewarding system, and one-on-one syncs with key team leaders can help ensure the retail business stays on track to achieve its objectives. Cascade provides a single source of truth that reveals in real-time if goals have drifted, making it easier to make any necessary adjustments.
- Connected data sources: Connect multiple disconnected business tools in one place with Cascade’s integrations , reducing context switching and maximizing efficiency.
- Live dashboards: Get real-time visibility into your business's performance with Cascade's live dashboards . Stay ahead of the game by monitoring critical metrics regularly and making data-driven decisions with ease.
- Progress reports: Get regular updates on how your retail strategy is performing with Cascade's progress reports. Track progress, identify areas for improvement, and stay on track to achieve your objectives.
Tired of spending hours and hours putting together reports for the management board? Tedious! Let's face it, manual reporting can be a real drag.
But with Cascade, you can focus on what really matters - analyzing business performance and making data-driven decisions. So, you can impress the management board with spot-on, accurate strategy reports that show how their business is doing.
Retail Strategic Plan Example + Template
Ready to start crafting your own execution-ready plan? To make your strategic planning process easier, we’ve created a real-world inspired strategic plan based on Costco’s, the world’s third-largest retailer, annual report.
Here’s what Costco’s strategic plan would look like following the strategic planning model we outlined in step 2 above:
Focus area: Efficiency
Objective: Reduce our costs without sacrificing quality
Actions: Expanding the in-country sourcing options / Acquire and develop cloud-based software to manage logistics of big and bulky items / Decrease the Cost Of Goods Sold (COGS) by 18%
Measures: Net sales, COGS, delivery time
Here’s a preview of Costco’s strategic plan template:
When you sign up, you'll get instant access to a template pre-filled with Costco's examples. Now, keep in mind that this template is meant to be an inspiration. We encourage you to customize the template, fill in the elements, and align it with your retail strategy.
👉 Click here to get instant access to the strategic plan template pre-filled with Costco’s examples.
The Key to Retail Success in 2023: An Execution-Ready Strategic Plan 🚀
In the fast-paced retail world, having a solid strategic plan is crucial, but it's just the first step. The real game-changer is executing that plan flawlessly. That's where Cascade comes in to revolutionize the traditional approach to strategic retail management and strategic planning. With Cascade, you can turn your vision into a tangible and actionable plan that's ready to be executed.
So what are you waiting for? Get ready to soar to new heights and connect the dots between planning and execution with Cascade.
Start today with a free forever plan or book a guided 1:1 tour with one of our Cascade in-house strategy execution experts.
Retail Strategic Planning FAQs
What is the retail mix .
The retail mix is a combination of elements that retailers use to create a unique shopping experience and meet the needs of their customers. It includes seven elements, also known as the 7 Ps of retail marketing: product, price, promotion, place, people, process, and physical evidence. By examining each of the 7 Ps and considering how they align with the overarching business strategy, retailers can create a cohesive plan for growth and successful retail positioning.
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Your toolkit for strategy success.
Module 5: Strategic Retail Planning and Management
Steps of retail strategy planning, learning objectives.
- Outline the steps of retail strategy planning
Strategic planning is a formal process. Thus, it is marked by specific activities in which firms engage to build a marketing plan, ensuring that the entire organization is aligned on strategic priorities. The actions included in strategic planning are:
Situational analysis, customer analysis, tactical planning, implementation and control.
A firm might pursue any number of objectives for any number of reasons. For example, an objective around sales could be expressed by total revenue, total units, or YOY (year over year) growth.
Yet these objectives, though all focused on sales, are not all the same. There are clear difference between those measures and what they might mean for an organization. Further, the measure is only part of the consideration. The stated objective might be made with an eye ultimately on profitability or market share or operational efficiency. Objective setting is not just stating a goal, ambition or target. It isn’t only about WHAT the firm plans to accomplish, such as “grow category sales by 4%” or “increase profit to $150k” or “reduce returns to <5%.” It must also include the plan for HOW the firm can accomplish that goal, which implies WHY the objective is strategically important.
In this way, the objectives listed above might be revised to read:
- “Grow category sales by 4% by increasing merchandising and promotional activity.”
- “Increase profit to $150k by introducing new flavors and regional brands.”
- “Reduce spoilage to <5% by increasing stock rotation in produce.”
As you can see, the specific measurable goal didn’t change. But, each objective now includes language around how it will be achieved. And, in doing so, they imply the organizational priorities, the “why.” By adding this detail, the firm helps the broader organization focus on the activities that support the strategy.
For example, while we could raise prices or reduce product costs or eliminate marketing expenses to increase profit by $150k, the inclusion of “by introducing new flavors and regional brands” informs the organization how the objective is to be met. And, in doing so, we understand that there is value in changing our assortment to provide more variety and popular local items for shoppers. Thus, there’s little room for confusion about what’s important. In this case, it is likely the shopper experience, reflected in variety and local products. Thus, the firm helps the broader organization focus on the activities that support the strategic opportunity and gives it meaning.
Situational analysis helps decision-makers in the firm understand what to do and how to do it. At its most basic level, it’s a multi-dimensional consideration of the context (the environment in which we’ll compete), organizational capabilities, customer, and competition. These factors describe the business environment, how our own abilities can deliver value relative to consumer needs, and the likely actions/reactions of our competitive set.
Customer analysis is a critical activity that ultimately helps focus marketing and sales resources more efficiently. It includes research into and analysis of consumer behavior, the results of which inform segmentation, targeting, and positioning. Thus, rather than marketing a product or actively trying to sell it across a wide swath of the total population, customer analysis helps break the population into smaller homogenous segments. From these, marketers select the sub-population of potential customers who are the most attractive and most accessible for targeting.
This is based upon both the long-term economic attractiveness of the segment and the firm’s organizational capabilities. In this way, the firm can optimize its marketing mix to position its offerings to meet these consumers’ needs. This both ensures that consumers’ needs are satisfied and creates a virtuous cycle wherein the firm can continue to innovate, developing products that suit its core consumers, despite changing needs and demands.
Tactical plans are the short-term actions the firm takes to affect the controllable elements of the strategy. For example, if a firm has the objective to “grow category sales by 4% by increasing merchandising and promotional activity,” a relevant tactic might be to plan robust promotional activity in key seasons. For example, this might mean that merchants engage their vendors in the soft drink and salty snacks categories to support promotions and allocate in-store space for merchandisers or store associates to build displays in advance of the New Year’s holiday or the Super Bowl. It could also mean that the corporate marketing team develops in-store circulars or television commercials to promote sale items around Thanksgiving, asking store managers to bring in shippers and high backstock levels to ensure sufficient inventory is kept on-hand. Each of these examples illustrate how a short-term tactical execution supports the broader objective of growing category sales by 4% by increasing merchandising and promotional activity.
Implementation and control refers to how the firm puts its strategic plan into place, including how it organizes cross-functionally and communicates priorities. Further, it also includes how the firm tracks progress toward its objectives, measuring performance so that adjustments can be made, if necessary. Certainly, a firm is responsible for managing its controllable variables. But, robust monitoring and control systems help firms react and adjust to uncontrollable variable like changes to the business environment or specific competitive activity.
Strategic planning is a formal process firms (should) undergo to develop a plan for how best to compete, given the business environment, the firm’s own capabilities relative to the needs of the customer and the anticipated actions/reactions of competitors. The outcome of this process is a marketing plan, the “road map” for how the firm will pursue its strategic objectives. It is a shared document to ensure that the entire organization is aligned on priorities and action items, regardless of function.
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- Steps of Retail Strategy Planning. Authored by : Patrick Williams. Provided by : Lumen Learning. License : CC BY: Attribution
7 Strategic Retail Planning Steps To Optimize Your Brand’s Growth
A comprehensive 7-step playbook to strategic store planning that will help you improve your processes and streamline retail growth.
When a customer heads to your store to buy a much-awaited video game on release day, the last thing they want to hear is, “Sorry, we’re sold out.”
If they do, it’s unlikely those folks will come back to shop with your brand – especially if your competitor has that product in stock.
In fact, 58% of shoppers take their money elsewhere due to 1 poor customer experience (like going out of stock). Luckily, a little retail planning can sidestep this worst-case scenario completely. Here’s how.
What is retail planning?
Retail planning is the business process of creating a data-based strategy to meet customer demand and maximize their return on investments (ROI). Put simply, retail planning helps you accurately anticipate and prepare your business for the future.
That’s because retail planning is key to competing in an ever-changing market and ensuring sustained growth. How? One way is through demand planning .
Demand planning is a genre of retail planning that ensures you have the right amount of inventory to fulfill customer demand. And so so without racking up expensive holding costs or stocking out.
7 strategic steps for your retail planning process
Market shifts, changes in consumer demand, and various other factors conspire to make it impossible for retailers to maintain optimal inventory levels .
In a 2017 study , 34% of retailers admitted to shipping an order late because they unknowingly sold a product that was out of stock. But the impact goes far beyond a few late orders.
Stockout costs North American retailers $129.5B annually . And retailers worldwide an estimated $1T annually.
So, how do you start retail planning to avoid stockouts ? It’s easy – just follow the 7 steps we’ve outlined below to begin your retail planning journey.
Step 1: Begin with market analysis
The first step in retail planning is doing your homework on your market (AKA conducting a market analysis).
This means deeply researching the marketplace (including your competitors, consumer interests, target persona purchasing habits, DTC trends , and alternate product offerings) to gain valuable insights about your customers and industry.
Here are 4 essential steps to conducting your market analysis:
- Identify your target customers. You can only cater to some kinds of customers. So, start by identifying your target customers to zoom in on those interested in your products. You can rely on 1 of 5 types of market segmentation to narrow down your target customers: demographic , psychographic , behavioral , geographic , and firmographic .
- Research industry trends. Frameworks like market gap analysis and PEST analysis will give you an overview of the landscape and get into nitty-gritty details like market size, trending supply chain issues , and projected growth or decline. You can leverage all this knowledge to map the right product offerings and supply.
- Assess the competition. Now, it’s time to hone in on what other retailers are already doing in your space. After all, your competitors’ weaknesses could be your strengths. For example, maybe their customer experience is sub-par, or they’re selling lower-quality products. With that information, you can make informed decisions that will differentiate your brand from the competition. Start with a competitive or SWOT analysis to determine your market position.
- Record your findings. You’ve gathered all this handy data—now what? List relevant information, such as the market size and growth rate, projected trends, customers’ interests, and personas. This data can help you decide where to focus your energy and invest your resources.
Step 2: Analyze your customer behavior
Where do your customers like to shop? Are they budget-conscious and always looking for a good deal? Do they get recommendations on what to buy from friends and family?
Knowing how your customers behave gives you insight into what influences their buying decisions, like pricing, alternate products, brand loyalty, culture, beliefs, and customer journey stage.
For example, say your customers are part of the 67% of shoppers that now shop more online than they did pre-pandemic. In this case, you should invest more in your direct-to-consumer experience.
Or, if you learn your customers are price-sensitive, try stocking up on low-priced items or offer deals (like product bundles ).
Once you know your customers’ habits, you’ll be able to identify service gaps, revise your marketing tactics, plan your inventory, and cater to their specific needs.
But how do you analyze your customer’s behavior to find this information?
Start by looking at past historical sales data to predict future inventory needs. Meaning, look for patterns in your historical sales data. For instance, are there products they love (or typically don’t buy)? When and where do your customers shop? What’s their average order value ?
Not seeing any obvious trends? You can always go to the source and conduct customer interviews. Quick 20-minute-or-so conversations with your best and worst customers are an easy way to understand what drives their behavior.
Then, funnel those findings into your demand forecasts to ensure you stock the right amount of inventory.
Alternatively, you can use a demand forecasting tool (like Cogsy) to analyze this data for you. This can be the smarter, more cost-effective way to go. Why? Because it removes common forecasting mistakes that typically lead to overstock and stockouts. That way, you can confidently maintain optimal inventory levels.
Step 3: Set SMART goals
Now that you have all these great data points, it’s time to set specific, measurable, achievable, relevant, and time-bound (SMART) goals to help you organize your priorities.
A study by the Dominican University of California found that 70% of people who created SMART goals achieved them (compared to 35% who used other goal-setting methods).
So, what does a SMART goal look like?
- Specific: Consider the 3 Ws (what needs to be accomplished, who needs to do it, and when). For a retailer, that could be working with your ecommerce staff to decrease the time it takes to ship orders by the end of the year.
- Measurable: Don’t be too broad – setting quantifiable goals helps track progress and holds you accountable. For example, maybe you want to decrease your shipping times by 3 business days by the end of 2023.
- Achievable: Take on only what you can handle. Meaning, consider the resources you have at your disposal and set goals you can realistically achieve with some effort. For instance: You may want to cut your shipping time by next month, but that may be possible with your current fulfillment team.
- Relevant: Think about the “why” behind your goals. Are these goals related to the big picture of your business, and will they help you achieve your long-term business objectives? Going back to our shipping example, you may want to cut shipping time because your overarching business goal is to improve customer service.
- Time-bound: To measure progress and determine if you’ve achieved your goals, you need to set a timeline and ensure your team knows what that deadline is. When goals are time-bound, you can evaluate outcomes and pivot if needed. Our goal, for example, is to cut shipping times by the end of the year. So, you can create a timeline for incremental improvements between now and then.
🤿 Dive deeper: A complete guide for writing SMART goals.
Step 4: Improve short-term, but think long-term
The retail industry is often unpredictable. Luckily, short-term planning can help you handle immediate priorities, such as seasonal fluctuations , while getting you closer to your long-term goals.
That said, short-term planning doesn’t mean last-minute planning. Instead, it means getting a jump on things for shorter time periods – all while working toward your long-term vision.
Having a long-term plan is crucial because it guides all your short-term efforts. After all, how would you know if you’re heading in the right direction without this big-picture goal?
For example, say your store sells school supplies, and your big-picture goal is to generate more revenue outside the peak back-to-school season. Then, identify other smaller sales peaks throughout the year.
Perhaps tape sales might go up around the holidays when everyone is wrapping gifts. If so, spin up a targeted marketing campaign to further increase demand for those SKUs.
If that doesn’t work, you can always diagnose what went wrong, return to the drawing board, and rework your plan based on your learnings.
Step 5: Determine the right retail strategy
A retail strategy is a plan to promote your products to the right customers at the right time.
That’s where the 7 Ps of marketing come in:
- Product: Consider your products, their unique selling proposition, benefits, and whether they meet customers’ needs. You can also leverage a BCG matrix to identify your star products and your poorest performers – this can help determine your ideal product mix.
- Price: A good pricing strategy considers the cost of the product and adds a markup, which is your profit margin . Depending on the product category, demand, and market conditions, you can use several pricing strategies, from value-based to skimming.
- Promotion: How will you get your products in front of your desired customers? Consider how you’ll increase demand and market your products. For example, boutique brand Urbanä uses humor in their Instagram posts to engage a wider audience. But for product launches, they release the details early to super fans in their private Facebook group called “The Boob Crew.” This strategy has kept their best customers engaged for years (while growing that customer base).
- Place: This comes down to where you sell your products. When done right, retail space planning can make your store stand apart from the competition and offer customers a unique experience. A thoughtful retail design along with the brand’s cool logo design attracts customers and encourages them to stay in your store longer.
- Physical evidence: This refers to physical, often tangible aspects of retail planning, from retail store planning to visual merchandising, branding, and even product packaging.
- Process: It’s all about quality assurance. You can increase efficiency by ensuring consistent procedures and business practices while offering great customer service at every interaction. To get there, focus on employee training, customer service practices, and accounting, to name a few. You can also create a process flow diagram for your employees to make sure your team is aware of key business processes and completes tasks more efficiently.
- People: As the word implies, the emphasis is on people. Focus on improving customer service to build brand loyalty and customer retention, the ideal outcome (and most cost-effective) for any retail business.
Many retailers leverage some or all of the 7 Ps when compiling their retail strategy. One example is Warby Parker , which created a customer-centric DTC model. The company relied on strong branding, a new model for selling glasses, and upfront pricing—all of which contributed to the company’s astounding growth.
“The thing that was immediately clear the second I met [the co-founders] was how thoughtful they were about the consumer,” said Ben Lerer , Lerer Hippeau Ventures Managing Partner. “The way they thought about going into retail [was] they listened to the customer like no other brand I had ever seen.”
Step 6: Implement your strategy
Now it’s time to test your strategic retail plan. Once you’ve settled on your product mix, the pricing strategy, how you’ll promote your products, and your store layout, you can start implementing your plans to see if they help you meet your goals.
For example, suppose your goal was to increase foot traffic in your new retail location by 5% in the next quarter. So you want to experiment with retail space planning. Try a unique store layout or visual displays as part of your strategy.
Effective implementation is critical in determining if your retail planning strategy is working. In fact, brands like Glossier and Allbirds reopened “experiential, Insta-friendly stores” despite plenty of success with online sales during the pandemic. Why? Because both brands believed shoppers wanted these offline experiences.
“Consumers aren’t looking to visit stores simply to transact – they’re hungry for meaningful and memorable experiences that can’t be recreated online,” said Kristy Maynes, Glossier’s SVP of retail.
And it turns out that Kristy was right. Glossier’s Seattle location saw more than 35,000 visitors in the first 2 months alone!
Step 7: Analyze your performance
Now that you’ve implemented your retail strategy, it’s time to measure your results. Take a close look at your success metrics to evaluate the performance of your retail plan.
Retail analytics are key to interpreting the success or failure of your strategy. So, the more accurate metrics you access, the easier it will be to measure outcomes and tweak your plan in the future if needed.
These metrics will entirely depend on your goals. But they might include total sales, revenue, amount of foot traffic, average cart size, average transaction amount, and any change in sales for specific products.
Use Cogsy to optimize store planning and meet customer demand
As we’ve established, retail planning is a challenging task. But the right retail planning software can make it a whole lot easier.
Cogsy takes the guesswork out of production planning and helps with your inventory management needs – without pesky human errors or time-consuming manual work.
With it, you can visualize your inventory health, know when you’re in short supply, and proactively adjust your orders if your planning seems off track. Then match your inventory needs with your annual growth plans without relying on a spreadsheet. Instead, you can identify your hot-selling products quickly, and Cogsy will alert you when any SKUs need to be replenished.
That’s not all. With accurate and advanced analytics, you’ll be able to provide suppliers with predictable purchase orders and build better relationships. If you were doing this manually, it’d be almost impossible to know in advance if you’ll be overstocking or under stocking – but Cogsy runs these calculations with plenty of time to plan.
This reliability can earn your supplier’s trust and even move you up in the production line if needed. But d on’t take our word for it – try Cogsy free for 14 days .
Retail planning faqs.
Retail store planning ensures the efficient use of your retail space, which allows you to attract new customers, improve the in-store and point-of-sale (POS) customer experience, and ensure they enjoy spending time at your store.
Production planning and allocation (P&A) in retail is the process of setting sales, inventory, or financial goals and tracking results to determine if you’ve achieved them or to help you identify where you didn’t meet the intended performance.
A ladder plan in retail merchandising refers to sales forecasting for specific products, including the projected timeline and current supply. It combines historical pricing, sales, and order data with future projections and product availability.
Strategic plans are big-picture, long-term goals that provide the overarching direction for your retail business. In contrast, operational retail plans are more granular and involve tactical steps to achieve your overall strategy.
3X founder of Cogsy, Conversio and WooCommerce. Author of Life Profitability.
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Strategic retail planning process (4 steps).
For the purpose of developing retail strategies, retailers are required to follow a step by step procedure or planning process. The planning process discusses/involves the present stage of business, the formulation, list of available strategic options, and the implementation of the selected strategies. Considering the importance of strategic decisions for the future success of the business, a systematic approach is essential.
The strategic planning process, which after considering the HR potential and USP of a particular store takes proper shape, is normally divided into following steps:
1. Deciding the store’s philosophy, mission and objectives,
2. Situation analysis,
3. Formulation of retail strategy
4. Strategy implementation and control.
1. Deciding the store’s philosophy, mission and objective s:
The retail strategic planning process starts with the identification of store’s mission for its existence and hence the scope of the retail store. The mission of a store entails identifying the goods and services that will be offered to customers. It also deals with the issue that how the resources and capabilities of a store will be used to provide satisfaction to customers and how the store can compete in the target market vis-a-vis its competitors.
The mission also involves the way of store’s functioning. How a store will work and accomplish its day to day operations? What is the emergency planning? All are answered in the store’s mission statement. For example, Vishal Mega Marts, they have philosophy of customer satisfaction through “manufacturing to retailing”.
This reflects not only the way it tends to treat its customers, but discusses the secret of its competitive advantage, i.e. the profit saved from absence of intermediaries like agents and brokers, commission saved is distributed to customers by way of low priced items.
Once the organization mission has been determined, its objectives, desired future positions that it wishes to reach, should be identified. Stores’ objectives are defined as ends which the store seeks to achieve by its USP (Unique Selling Preposition) and operations.
The store’s objectives may be classified into two parts:
(i) External store objectives, and
(ii) Internal Store Objectives.
External store objectives are those that define the impact of store on its environment, e.g., to develop high degree of customer confidence by providing quality goods at lowers prices. Internal store objectives, on the other hand, are those that define how much is expected to be achieved with the available resources, e.g. to raise the store turnover by 15% in the coming year.
2. Situational Analysis (SWOT Analysis) :
The objective of doing store’s situation analysis is to determine where the store is at present and to forecast where it will be if formulated strategies are implemented. The difference between current and future position (forecasted) is known as planning or strategic gap. Under organisational analysis, normally stores study their external (environmental) and internal environments.
The purpose of examining the store’s external environment is to study the opportunities and threats in the retailing environment. The external analysis studies factors that affect the macro-environment of retailing industry and the task environment.
Under external analysis, retailer studies these parameters:
(i) Economic environment of retailing,
(ii) Political environment of retailing,
(iii) Legal environment of retailing,
(iv) Socio-cultural environment of retailing,
(v) Technological environment of retailing, and
(vi) International environment of retailing.
The store’s task environment can be influenced directly by retailer’s own policies and includes competitors, suppliers and customers.
The objective of studying internal environment of its own store is to identify the store’s strengths and weaknesses. The store will try to increase its capabilities, and overcome the weaknesses that deter the business profit. While doing the internal analysis, store examines the quality and quantity of its available resources and critically analyzes how effective these resources are used.
These resources for the purpose of examining are normally grouped into human resources, financial resources, physical resources (assets) and intangible resources (goodwill, image etc).
The types of questions that are enquired under different resources are:
Human resource :
(a) Is present strength of employees at various levels is sufficient for future action?
(b) Are the employees trained and capable to perform the tasks assigned to them?
(c) Are the employees loyal to store?
(d) Are the employees punctual and regular?
(e) Are the employees skilled in their assigned tasks?
Financial resource :
(a) What is the total cash flow from store’s present activities?
(b) What is the ability of retail store to collect money at the time of requirement/ emergency?
(c) How much effective and stable financial policies are?
(d) What is the ratio between fixed and current assets?
(e) What are the contingency plans in case of negative cash flow?
Physical resources :
(a) What is the contribution of fixed assets?
(b) What is the position of abandoned/unused assets?
(c) How effective and update are the store’s information systems?
Intangible resources :
(a) What is the present capability of the company’s management?
(b) How effective is the R & D cell?
(c) How good is the competitor’s intelligence system?
(d) How effective store’s loyalty programmes are?
(e) What is the capability of retail store manager?
(f) Are customers loyal towards company’s products?
3. Formulation of Retail Strategy :
In this stage, after analyzing the store’s capabilities in terms of HR, finance, physical and intangible resources, a store manager formulates retail strategy with regard to marketing, retail positioning and retail mix. Marketing is the way to achieve the set objectives. Therefore, marketing strategy should be devised according to store’s primary and secondary objectives. Generally, marketing strategy is developed on the basis of product and/or market segmentation instead of the market as a whole.
Retail Positioning is a plan of store’s action for how the retailer will enter the target market and will compete with its main competitors. Retail positioning from a retail store’s point of view, is a step by step plan to create and maintain a unique and everlasting image of the store in the consumers’ mind.
This process reveals the fact that understanding ‘what customer wants?’ is the success key to retail positioning in the market. Under retail positioning, a retailer conveys the message that its products are totally different and as per customers’ requirement. The reason here is that customers are attracted towards items that are new for them with the perception that if it is new, it will have some extra/added features.
Retail positioning is made possible under these circumstances:
(i) By differentiating the store’s merchandise from its competitors,
(ii) By offering high level of after sales services at nominal/no cost, and
(iii) By adopting low pricing policies.
Retail Mix is the blend of various retail activities which in total present the whole concept of retailing. The retail marketing and retail positioning strategies are put into effect by this retail mix – the set of controllable elements that a retailer can use to satisfy customers’ needs and to influence their buying behavior and compete effectively in the target market. Utmost care is required on the part of retail manager to select the various elements for a perfect retail mix.
The main elements a retail store manager has to face are:
i. Store’s location
ii. Merchandise assortment
iii. Pricing policy
iv. Customer service mechanism
v. Visual merchandising
vi. Personal selling efforts
vii. Advertising efforts and
viii. Store’s internal and external environments.
4. Strategy Implementation and Control:
It is concerned with the designing and management of retail systems to achieve the best possible combination of human, financial, physical and intangible resources of a retail store to achieve the formulated objectives, without timely and effective implementation also requires scheduling and coordination of various retail activities. For example, the coordination between the marketing and sales promotion department is a must for sales promotion to make success.
Further, the spirit of team work is an essential part for the success of strategy implementation. If the retail store’s strategies are competitive, marketing efforts are as per demand but the sales promotion employees are not taking it seriously or are ineffective, result will not be up to the mark.
The implementation of new retailing strategies sometimes require changes in the way of functioning and duties that can lead to resistance from employees. Therefore, stores should take positive steps to reduce this resistance to change and to convince the employees that it in a long term will be beneficial for both the store and employees.
The positive steps include the following:
(ii) Detection, and
It means after implementing the retail strategies, retailer should assess how effectively strategies are being implemented, how far the strategic objectives are being achieved and what has been left to be achieved in the store’s objectives list. Therefore, retailers inspect the implemented strategies from time to time and detect the fault (if any) in the implementation of various retail elements. If any deficiency is found during inspection process, that has to be corrected with immediate effect without any further loss to store.
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10 Stages Of Strategic Retail Planning Process For Higher Efficiency
What Is The Retail Planning Process?
Strategic planning is the skill of developing detailed business plans, putting them into action, and assessing the outcomes in light of a company's overarching long-term objectives or aspirations. It is a theory that concentrates on integrating different corporate divisions (such as accounting and finance, marketing, and human resources) to achieve a company's strategic objectives.
Strategic management and strategic planning are fundamentally the same thing. This is so that businesses can compete in a market that is always changing and ensure sustainable growth. How? Demand planning is a means of doing it.
A type of retail planning called demand planning makes sure you have enough inventory to meet client demand. And so on without incurring high holding fees or running out of goods.
The Importance Of A Successful Retail Planning Strategy
Businesses require a productive strategy for retail planning with the help of the retailing software . They will be able to execute marketing campaigns, manage supply chains, and manage inventories thanks to this method. Without a defined plan, retailers cannot effectively market their goods or specify their product line.
Companies should plan their products and establish clear objectives and the measures required to reach them. specifically when working on a marketing assignment. A strategic plan outlines a company's multi-channel sales strategy for products and brands.
How it expands the reach of the target audience while streamlining internal processes and E-commerce inventory management software . The processes in the planning process for retail are described in this article. Retailers choose their retail store planning strategy as part of the planning process for their business.
They are educated on the market's competitiveness as well. Any retail business should have a retail plan. Otherwise, every time you need to make a business decision, you will be faced with a problem.
10 Strategic Steps For Your Retail Planning Process
Growth of strategies.
A corporation will first conduct an internal and external audit to evaluate its current status before coming up with a strategy. This will aid in determining the organization's prospects, threats, and strengths as well as flaws. The study helps managers determine which strategies or markets to pursue or forgo, how to effectively use the company's resources, and whether to take steps like expanding operations through a merger or joint venture.
Business strategies have a long-term impact on the success of organizations. The authority to allocate the resources required for its implementation typically only extends to high management leaders.
Setting goals is essential to a business's success. The aim of a business need not be to maximize profits. A company might work toward several objectives at once. B. Develop the company, boost sales, broaden the product offering, etc. within a year. All of the aforementioned objectives are geared toward boosting revenue.
- Internal Requirements: Retailers must receive reports and establish objectives for actual income and sales based on product performance. Clear monthly, quarterly, and annual goals can be established by businesses. This is done to inspire workers and keep them focused on driving up sales.
- Supplementary Requirements: They have to do with the overall effectiveness of the retailer and the interaction with customers. client service, client loyalty, and product pricing are all included in this. Businesses should strive to offer individualized experiences that draw in new clients and increase their retention rates.
Understand The Market
After the definition of organizational goals. Analyzing the market conditions you want to penetrate is the next stage. You can make smart selections with the aid of market analytics. You can plan appropriately if you are aware of your competitors' strategy. What your customers want, how to fulfill those expectations, and how to outperform your rivals in the market.
You can learn about opportunities and dangers by conducting a market study. What steps ought to be taken in the marketplace? In addition, the study enables you to identify the advantages and disadvantages of your business. By doing so, you can improve your flaws and turn them into your strengths. Decisions can be made on the use of many resources, including financial, human, intangible, and physical resources.
Conduct A Client Analysis
Correct target group-related research ensures crucial planning flexibility. Retailers should therefore investigate all options that might enable them to realise their corporate objectives. There are usually numerous ways to achieve a goal, and only thorough studies can assist retailers in finding them. While others are classic, some are more contemporary and fashionable.
Study the variables that affect consumers' purchasing decisions to have a deeper understanding of this. You need to look into effective retail customer service strategies in addition to how to manage it well. Consider their strengths, weaknesses, opportunities, and threats when new opportunities present themselves. To do this, a SWOT analysis must be performed on each opportunity.
Plan And Execute Strategies
Once your objectives are clear, develop a retail planning approach and stock the shelves with your product. One of the most tiresome steps is this one. The longest step might be this one. This is due to the fact that a number of aspects must be taken into account before a product can be introduced into a physical retail setting.
The creation of successful product and brand promotions can begin with marketing teams. Retailers must develop a favorable reputation that not only draws customers but also reflects their expectations. Maintaining competition is a key goal when developing a retail strategy.
Companies can accomplish this in a variety of ways, including through price, selection, and quality. A crucial benefit is giving your customers an experience they can only get from you. However, businesses need to adapt to the latest market trends as they grow.
Pay Close Attention To Short-Term Planning
It's time to divide the retail strategy plan into smaller strategic plans now that it has developed. Strategic short-term planning allows for faster, more accurate plan execution. Advertising campaigns are a component of retailers' short-term retail strategies.
This includes TV commercials, pamphlets, and advertising for particular seasons or festivals. All of this guarantees a consistent flow of income and aids in creating lasting relationships with clients.
Management should create a defined plan based on the short-term objectives of the organization to meet metrics. For instance, a business can concentrate on floor design and specialized marketing strategies to increase sales over the Christmas season. This will speed up traffic.
Running digital advertisements, advertising campaigns, and special deals are all part of this. Store owners can also change their storefronts to draw passersby. The planning process should be started by retailers months in advance. This will guarantee that all resources are allocated effectively. Otherwise, due to a lack of planning, businesses could not have enough money to fund their plans.
Any astute businessman is aware that today's success does not guarantee future success. As a result, it is critical for managers to assess the effectiveness of a chosen strategy following the implementation stage. Reviewing the internal and external elements affecting the strategy's execution, monitoring performance, and taking corrective action to improve the plan's effectiveness are the three key components of strategy evaluation.
For instance, a business might learn that, in order to achieve the required changes in customer relations, it needs to acquire a new (customer relationship management) CRM software package after adopting a plan to improve customer service.
The high management, middle management, and operational levels of a hierarchy are the three levels at which the three phases of strategic planning take place. As a result, it is crucial to encourage contact and communication among managers and staff at all levels in order to make the company work as a more cohesive and productive team.
Implementing The Strategies
The methods determined whether the strategies were effective and how they contributed to rising sales. It is difficult to implement a strategy. Planning is necessary, the company must adapt, and personnel responsibilities might also need to be altered. Although you might be harassed by coworkers, you can avoid this with careful planning. Employees might divide the workload to make it feel more manageable. When their work is acknowledged, you can also award bonuses.
Make Retailing Methods
Plan your relative retail approach now that your goals have been established and you have determined your market position and retail mix. Your retail strategic plan should ideally be the most lucrative one. Prior to making your retail strategy decision, make sure your retail mix is balanced and that you are adhering to your retail positioning.
Each strategy or plan has a unique set of benefits and drawbacks. Choose the strategy that will save you money and be more effective than others. Omnichannel retail tactics are regarded as being more successful in the present. In addition, every shop should follow the retail trends in their particular business to keep one step ahead of the competition.
After a strategy is implemented, your work is not done. Analyze its performance to determine where you experienced the greatest issues. What issues have you furthermore encountered? Learn from them, and use what you've learned in your future strategic initiatives.
The success of the entire retail process can be evaluated by merchants using a variety of retail measures. During the planning and implementation phase, these critical performance metrics give direction for improvement. A clear image of the improvement in retail margins can be seen in the analysis produced by the use of performance analysis tools.
Process inspection, detection, and analysis are all part of the performance analysis step. The success rate of planning is increased by timely, frequent strategy reviews. Retailers need to be watchful and aggressive in fixing problems. The performance analysis phase can be used to pinpoint these flaws.
There will always be external factors that could have a negative impact on your sales, therefore it's important to remember that no one gets retail business planning flawless the first time. Retail planning is crucial for creating corporate objectives and maintaining a place in a cutthroat industry.
Without a defined strategy, retail companies run the danger of spending time and resources on ineffective marketing tactics. You'll be well on your way to making your retail store as profitable as possible by combining research and planning and altering your approach in accordance with the findings from your research.
Retailers could use tools like retail inventory management software in addition to retail planning for easier management of their retail businesses.
Strategic retail planning is a process to outline business goals, align resources, and optimize operations for higher efficiency in the retail industry.
The stages include market analysis, goal setting, SWOT analysis, strategy formulation, budgeting, implementation planning, execution, monitoring, evaluation, and adjustments.
Market analysis involves researching market trends, consumer behavior, and competitor strategies to make informed decisions and shape an effective retail strategy.
SWOT analysis assesses a retailer's strengths, weaknesses, opportunities, and threats, providing valuable insights to develop a strategic plan that maximizes strengths and addresses weaknesses.
Budgeting helps allocate resources effectively, ensuring financial stability and enabling retailers to implement strategies that align with their financial capacity.
Successful execution involves clear communication, employee training, and efficient allocation of resources, monitored closely to ensure alignment with the devised plan.
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