RETAIL STRATEGIC PLANNING

1
RETAIL STRATEGIC PLANNING

• W. Frank Dell II, CMC
• September, 2004

2
AGENDA

• INTRODUCTION
• STRATEGY
• TACTICS
• OPERATIONS

3
Objectives

• Define Retail Strategic
• Document components and elements
• Describe the development process
• Identify common mistakes

4
Strategy Definition

• A plan, method or series of maneuvers for
  obtaining a specific goal or result

5
Overview
6
Time Horizon
7
Maslow Theory
8
AGENDA

• INTRODUCTION
• STRATEGY
• TACTICS
• OPERATIONS

9
What Business?
10
Business Goals

• Sales
• 1 million
• 5 million
• 100 million
• 1 billion
• Geographic
• City/Region
• Country
• Continent
• World

Market
Business
Competition
11
Consumer is King
The Golden Rule He who has the Gold (consumer)
rules
12
Which Consumer?
Buyer
User/Customer
13
Define the Target Market

• Sex
• Age
• Education
• Income
• Life Style
• Ethnicity

14
Target Market - Sex
Household
Female
Male
15
Target Market - Age

• Infant 1 to 3
• Junior 3 to 8
• Youth 8 to 12
• Teen 12 to 19
• Young Adult 19 to 30
• Middle Age Adult 31 to 55
• Senior Adult 55 to 100

16
Target Market - Education

• No education
• Elementary School
• High School
• College / University
• Advanced Degree

17
Target Market - Income

• Person Vs Household
• Income
• 2,100 Rubles per month
• 3,500 Rubles per month
• 7,000 Rubles per month
• 10,500 Rubles per month
• 14,000 Rubles per month
• 17,500 Rubles per month
• 17,501 Rubles per month

18
Target Market Life Style

• Vegetarian
• Diabetic
• Over-weight
• Health nut
• Active

19
Target Market - Ethnicity

• Geographic region
• Race
• Religion

20
Target Market
21
Factor in Trends

• Aging population
• Growing Middle Class
• Changing Health Life Style

22
Elements Format Size

• How many formats what size?

23
Elements - Merchandise

• Reason for the store
• Department / Category / Sub-Category
• Match target customers needs wants
• Interest secondary consumers
• Depth and Breath of presentations
• Brands
• Sizes
• Flavors / Styles

24
Elements - Merchandising

• Role
• Destination
• Routine
• Occasional / Seasonal
• Convenience

• Quality
• Good
• Better
• Best

25
Elements - Decor

• Fixtures
• Lighting
• Flooring
• Signage

26
Elements - Services

• Checkout
• Cash
• Credit Debit card
• Sales assistance
• Returns
• Lay-A-Way
• Gift Registry

• Demonstrations
• Sampling
• Delivery
• Installation
• Education

27
Brick Vs Click

• Positives
• Additional Sales
• Brand building
• Reach larger target market
• Lower investment

• Negatives
• Different business
• Delivery
• Divides resources

28
Operating Capital Models

• Sales
• Cost of Goods
• Gross Margin
• Labor Benefits
• Utilities
• Rent
• Advertising
• - Taxes
• Profit

• Site
• Store Construction
• Fixtures
• Merchandise
• Capital Cost

Payback
29
Validation
30
AGENDA

• INTRODUCTION
• STRATEGY
• TACTICS
• OPERATIONS

31
Overview
32
Advertising
Television
Radio
Magazine
Mail
Newspaper
Internet
33
Pricing
Hi Lo
Seasonal
Everyday Low Price
34
Categories

• Traffic Building - High share, frequent purchase
• Transaction Building - Higher price, impulse buy
• Profit Contribution - High gross margin, turns
• Cash Generation - High turn, frequent purchase
• Excitement Creating Impulse, lifestyle
• Image Creating Frequent purchase promotion
• Turf Defending Customer draw

35
Promotions

• Types Unlimited
• Price off
• Buy one get one
• Continuity
• Coupons
• Joint SKU
• Match target consumers desires
• Support strategic image
• Incorporate Frequent Shopper Program

36
Location, Location, Location

• Where
• Work
• Live
• Play
• Travel mode
• Walk
• Drive
• Public transportation

37
AGENDA

• INTRODUCTION
• STRATEGY
• TACTICS
• OPERATIONS

38
Introduction

• A Strategic Plan that is or can not be executed
  is only a dream
• Each Department must define an action plan to
  achieve the strategy

39
Human Resources

• Attract
• Educate and Train
• Evaluate
• Retain

40
Logistics

• Inbound
• Store Vs Warehouse Delivery
• Method (truck, rail, water)
• Storage Processing
• Number warehouse by commodity
• Location and size
• Outbound
• Frequency, distance, temperature

41
Information Technology

• Hardware
• Processing power
• Security back up
• Software
• Transaction processing
• Management control reporting
• Analysis and planning
• Network
• Volume
• Distance

42
Store Operations

• Consistently execute customer service
• Merchandise in-stock
• Train for expansion

43
Commercial

• Selection
• Categories, Sub-Categories Items
• Pricing Promotion
• Inventory Turns
• Merchandise in-stock

44
Finance Accounting

• Manage cash
• Maintain budgets and controls
• Secure sufficient capital

45
Summary
46
Fatal Sins of Strategic Planning

• Have a weekend retreat once a year to talk
  about strategy
• Viewing Strategy as a diet
• Develop vision, mission and/or value statements
  as fluff
• Vision without action
• Failing to involve all in developing an action
  plan
• Failing to integrate planning

47
Fatal Sins of Strategic Planning

• Conducting business as usual after strategic
  planning
• Lacking a scorecard or measurement
• Doing what is easy rather than what is important
• Neglecting to benchmark against competitors
• Failing to make tough choices

48

• Thank You

49

• W. Frank Dell II, CMC
• President
• DELLMART Company
• 125 Hardesty Road
• Stamford, CT 06903 USA
• Tel [phone]
• Fax [phone]
• e-mail Frank_at_Dellmart.com
• Web Site www.Dellmart.com