RETAIL LIFE CYCLE
Introduction Stage
As the name implies, the introduction is the beginning stage of any business, characterized by innovation
and industry expansion. Entrepreneurs in this phase of development either introduce a new retail store
model, for example a particular product mix combined with a new service, or a new direction for an
existing store. Introductory stage stores should be prepared for low profits due to high development costs.
Business owners can often reenergize a failing business by returning the introductory stage with a new
approach.
Growth Phase
Once your store catches on, it enters the growth phase. As you grow, your profits increase and customers
rave about your brand. While this phase may feel like Christmas, competitors begin to copy you at this
point, diluting your brand and taking away some of your edge. The challenge in this stage is to keep
innovating enough so you have something new and exciting for your customers each time they visit.
Maturity Phase
Once you are fully established, you have a rhythm and you've gotten pretty good at keeping the store
stocked so customers can count on you. In this stage, you also have a lot of competition and your store
defines your industry instead of feeling new and different. Competition even may increase to the point
where your industry over expands, leading to declining profits and reduced customer loyalty. As this
happens, prices begin to drop as you and your competitors try to lure back customers with great deals. To
counter this, it is advised to inculcate innovation instead of discounting.
Decline
If you are unable to innovate sufficiently to keep your business new and fresh, it enters the last phase of
the retail life cycle: decline. At this point, your business may seem out of date and boring to customers.
Other retailers have caught their attention, and it's difficult to lure those customers back. Successful
businesses watch the trends in their industry and neighbourhood to anticipate the decline and change
before customers abandon them.
Tanuka Agarwal, 157/3
SEGMENTATION, TARGETING & POSITIONING
Segmentation
In marketing, we want to identify potential customers and convince them to buy. We also are interested in
convincing past customers to be repeat customers. We do this by providing products and services they
need and want. It’s all about making the right people aware of our value proposition. Everyone is unique
but we also tend to have interests in common with others. We want to identify those commonalities in the
most refined and granular ways possible. These are called niches. We use segmentation to identify niches
with specific needs and desires that we can articulate clearly. In mature markets we use segmentation to
find new customers. Segmentation allows us to focus our messaging and deliver it more effectively.
Marketing messages should be designed to address and inform each segment of the benefits and features
that are most relevant to that segment. This is a different approach from mass marketing where one size fits
all for all customer types. This approach is more efficient and affective, as it delivers the right mix to the
right group of people, rather than a spray-and-pray shotgun approach. Amazon Go is segmented on the
basis of the new age group in the market that is well equipped with modern day gadgets.
Targeting
In the next step, we decide to target one or more segments. Our choice should generally depend on
several factors. First, how well are existing segments served by other manufacturers? It will be more
difficult to appeal to a segment that is already well served than to one whose needs are not currently being
served well. Secondly, how large is the segment, and how can we expect it to grow? (Note that a
downside to a large, rapidly growing segment is that it tends to attract competition). Thirdly, do we have
strengths as a company that will help us appeal particularly to one group of consumers? Firms may
already have an established reputation. Amazon Go has targeted the audience based on how user friendly
are they with the technology.
Positioning
Positioning maps the variables discussed in the Segmenting and Targeting steps and defines the space
where your offering resides relative to competitors in the view of your customers. Thoughtful positioning
is critical in staking out a competitive advantage in the market. Positioning is a component of Branding,
which we will discuss next. Customer perceptions and feedback influence a brand’s positioning in the
market. Amazon Go is positioned in the buyer’s mind as a tech savvy technique of buying groceries and
household items where no lines are needed. One can just pick and go which is their strategy to attract.
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