THE STRATEGIC RETAIL PLANNING PROCESS,

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 objectives:

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 with the competitors.

2. Situational 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.

External Analysis: The purpose of examining the store’s external environment is to study the

opportunities and threats in the retailing 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.

Internal Analysis:

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 analyses 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?

3. Formulation of Retail Strategy:

In this stage, after analysing 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.

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.

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.

And company form the strategy in the form of retail mix.

4.IMPLEMENTATION AND EVELUATION OF STRATGY

This step includes three sub-steps, such as (1) implement retail business strategy. (2) measure and
evaluate the strategy at the right interval to determine the degree of success, and (3) take necessary
follow-up actions to retrack the business on the right path.

Implementation means to execute your plan. The retail store is fully equipped with necessary
facilities, merchandise is arranged properly and the staff is deployed at the servicing points.

In short, the retail store starts is retail business operations as per the strategy to serve the customers.
The store performs all necessary activities in a satisfactory manner to ensure maximum customer
satisfaction.
Once the strategy is implemented, the retail organization fetches the results. Now, a retailer has to
evaluate the results against standards (expectations) to determine the degree of success. If the
performance seems satisfactory, there is no need to take any major action.

But, if it is observed that the strategy has failed to produce the desired outcomes, the retailer has to
detect the causes and take follow-up actions. This is necessary to put the business on the right track.