1. Retail Market Strategy
~Eden Clifford

2. What is a Retail Strategy?
Sustainable Competitive Advantage
Retail Format
Target Market
What is a Retail Strategy?
Retail strategy is identifying the retailers target market, the format the retailer plans to use to satisfy the target market’s needs, and the bases on which the retailer plans to build a sustainable competitive advantage.
The target market is the market segment where the retailer plans to focus its resources & retail mix by type of merchandise & services offered pricing policy advertising & promotion programs, store design & visual merchandising, typical locations & customer services
A sustainable competitive advantage is an advantage the retailer has over its competition that is not easily copied by competitors & can be maintained over a long period of time.
SEE pg. 112

3. Target Market & Retail Format
Fashion Segments
Retail Formats
Conservative
Traditional
Fashion-Forward
Specialty Store
Fashion Bug
The Gap
The Limited
Talbots
Bebe
Urban Outfitters
H&M
Department Store
JCPenney
Kohl’s
Saks Fifth Ave.
Bloomingdale’s
Neiman Marcus
Discount Store
Family Dollar
Dollar General
Off-Price Store
Ross Stores
T.J. Maxx
Steinmart
Bluefly.com
Macy’s
Target Market & Retail Format
Kmart
Walmart
Target
Retail Concept
Retail Market
The retail concept is a retail management orientation that focuses on determiing the needs of the retailer’s target market & satisfying

4. Building a Sustainable Competitive Advantage
Relationship w/ Customers
Customer Loyalty
Building a Sustainable Competitive Advantage

5. Customer Loyalty Brand Image Positioning Unique Merchandise
Customer Service
CRM Programs
Customer Loyalty
Customer loyalty means that customers are committed to buying merchandise & services from a particular retailer. Loyalty means that customers will be reluctant to patronize competitive retailers

6. Relationships with Suppliers
Vendor Relations
Relationships with Suppliers

7. Efficiency of Internal Operations
Human Resource Management
Distribution & Information Systems
Efficiency of Internal Operations

8. Location
Starbucks creates a competitive advantage by picking multiple good locations that saturate an area

9. Multiple Sources of Advantage
McDonald’s long-term success is based on providing customers with a good value that meets their expectations, having good customers with a strong brand name, and offering convenient locations
By pursuing all these strategies effectively, McDonald’s has developed a strong competitive position in the quick-service restaurant market

10. Diversification (unrelated/related)
Target Markets
Retail Format
Existing
New
Market Penetration
Market Expansion
Format Development
Diversification (unrelated/related)
Growth Strategies
Market Penetration
Market Expansion
Retail Format Development
Growth Opportunities & Competitive Advantage
Diversification

11. Market Penetration Market Penetration growth opportunity Cross-Selling
Can involve either attracting new consumers from the retailer’s current target market who don’t patronize the retailer currently
Cross-Selling
Ex. BBW
Market Penetration

12. Market Expansion Market Expansion Growth Opportunity
Ex. Dunkin’ Donuts has been opening new stores outside its traditional target market in the northeastern United States.
Market Expansion

13. Retail Format Development
Retail Format Development Growth Opportunities
Ex. The UK based retailer Tesco has employed a retail format development growth strategy by operating several different food store formats that all cater to essentially the same target market.
Retail Format Development

14. Diversification Diversification Growth Opportunity
Related vs. Unrelated
Vertical Integration
Diversification

15. Growth Opportunities & Competitive Advantage
When retailers pursue market expansion opportunities, they build on their advantages in operating a retail format & apply this competitive advantage in a new market.
Growth Opportunities & Competitive Advantage

16. Global Growth Opportunities
Of the 50 largest retailers in the world, only 12 operate in one country
In India, men’s ready-made apparel generates about 2-3 times more sales than women’s apparel
Global Growth Opportunities

17. Attractiveness of International Markets
Country Potential
Country Support
Population (+)
Market share of modern retailing (+)
Population growth rate (+)
Quality of infrastructure, transportation & communications (+)
GDP (+)
Urban population (+)
GDP per capita (+)
Market share of leading domestic retailers (-)
Retail sales (+)
Ease of doing business (+)
Growth rate in retail sales (+)
Business-friendly laws & regulations (+)
Retail sales per capita (+)
Political stability (+)
Income distribution (+) or (-)
Age distribution (+) or (-)
Attractiveness of International Markets
Factors
The potential size of the retail market in the country
The degree to which the country does & can support the entry of foreign retailers

18. Keys to Success Globally Sustainable Competitive Advantage
Adaptability
Global Culture
Financial Resources
Keys to Success

19. Entry Strategies Direct Investment Joint Venture Strategic Alliance
Franchising
Entry Strategies

20. Strategic Retail Planning Process
Define the Business Mission
Conduct a Situation Audit
- Market Attraction Analysis
- Identify Strategic Opportunities
- Self-Analysis
Competitor Analysis
Evaluate Strategic Alternatives
Establish Specific Objectives & Allocate Resources
Develop a retail mix to implement strategy
Evaluate Performance & Make Adjustments
Strategic Retail Planning Process

21. Step 1: Define the Business Mission
Mission Statement
Ex. Maxine Clark, founder & chief executive bear at Build- A-Bear Workshop, in discussing her goals for the company says, “We also believe strongly that we need to give back to communities in which we have stores.
Step 1: Define the Business Mission

22. Step 2: Conduct a Situation Audit
Market Factors
Competitive Factors
Barriers to entry
Scale economies
Bargaining power of vendors
Competitive Rivalry
Environmental Factors
Strengths & Weakness Analysis
Step 2: Conduct a Situation Audit

23. Step 3: Identify Strategic Opportunities
Kelly Bradford presently competes in gift retailing using a specialty store format
See Exhibit 5.4 pg. 137
Step 3: Identify Strategic Opportunities

24. Step 4: Evaluate Strategic Opportunities
Both the market attractiveness and the strengths and weaknesses of the retailer need to be considered in evaluating strategic opportunities
Step 4: Evaluate Strategic Opportunities

25. Step 5: Evaluate Performance & Make Adjustments
The performance sought may be measured
Components:
A time frame within which the goal is to be achieved
The level of investment needed to achieve the objective
Step 5: Evaluate Performance & Make Adjustments

26. Step 6: Develop a Retail Mix to Implement the Strategy
Develop a retail mix for each opportunity in which an investment will be made & control & evaluate performance
Step 6: Develop a Retail Mix to Implement the Strategy

27. Step 7: Evaluate Performance & Make Adjustments
Evaluate the results of the strategy & implementation program
Step 7: Evaluate Performance & Make Adjustments

28. Strategic Planning in the Real World
Define the Business
Conduct a Situation Audit
Identify Strategic Opportunities
Evaluate Strategic Alternatives
Establish specific Objectives
Develop a Retail Mix to Implement Strategy
Evaluate Performance & Make Adjustments
Strategic Planning in the Real World

29. Assignment 1 Prepare an analysis of a company, using Glogster.
Identify its direct competitors, its target market & positioning, its strategy w/ respect to its competitors, its retail format (the elements in its retail mix: merchandise variety & assortment, pricing locations), and its bases for developing a competitive advantage to is competitors.
Assignment 1

30. Pick a company and outline the retailer’s strengths, weaknesses, opportunities & threats relative to its competitors.
Use Animoto ( for each element of the SWOT analysis.
Assignment 2

31. Explain & provide an example of each of the growth strategies using Prezi or Photopeach.
Include Market Penetration, Market Expansion, Retail Format Development, Diversification, and Competitive Advantage
Assignment 3

32. Visit 2 stores that sell similar merchandise categories and cater to the same target segments. How are their retail formats (the elements in their retail mixes) similar? Dissimilar? On what base do they have a sustainable completive advantage? Explain.
Create a podcast or use blabberize explaining your findings.
Assignment 4

33. Pick a store that you believe has an effective customer loyalty
Pick a store that you believe has an effective customer loyalty. Explain why you believe it is so.
Remember to include the activities that retailers engage into to build loyalty: (1) developing a strong brand image, (2) having a clear & consistent positioning, (3) providing outstanding customer service, (4) unique merchandise, and (5) customer Service
Use any media to sum your explanations.
Assignment 5

34. Using Comic Life choose a retailer and describe how it has developed a competitive strategic advantage.
Include barriers to entry, scale economics, customer loyalty, and the availability of great locations.
Assignment 6