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The fundamentals !
STRATEGIC RETAIL MANAGEMENT
TYPES OF ENVIRONMENT
 Retail institution types vary based on retail characteristics such as
products, scale of operation, and mix of store attributes. The
primary retail institution types are as follows:
 Department store, discount store, and specialty store.
 According to the U.S. Bureau of Census classifications of product
developed in1924, product categories were named based on the
retail institution type where they were displayed and sold
(McNair & May, 1978).
 For example, products, which were sold in neighbourhood stores,
such as grocery stores, drug stores, and hardware stores, have
become convenience goods. Products, which were sold in large
department stores, have been named as shopping goods.
Specialty goods have become products sold in specialty stores,
such as shoe stores, men’s clothing stores, and jewellery stores.
THEORIES OF RETAIL CHANGE
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CYCLICAL THEORY
 Cyclical theory basically explains the different phases in a
company. According to this theory, change follows a pattern and
all phases have identifiable attributes associated with them.
 There are three primary components associated with the theory:
wheel of retailing, retail life cycle and retail accordion. While
wheel of retailing refers to a company entering the market with
low prices and affordable service in order to challenge
competitors, retail life cycle addresses the four stages that a
company goes through when entering the buyer's market.
 The retail accordion aspect of cyclical theory suggests that some
businesses go from outlets that offer an array of products to
establishments providing a narrow selection of goods and
services. These establishments later return to a generalized
outlet store. Retail accordion is also known as general-specificgeneral theory.
WHEEL OF RETAILING

McNair (1958) proposed the Wheel of Retailing theory to explain a retail
evolution pattern, which he had observed in European and U.S. retail
operations.

When retail institutions are successful, other rival retail institutions
rapidly imitate and adapt those characteristics (Berens, 1980; Edwards,
1958).

The innovative retailer will enter the wheel with low costs, low margins
and low price products. A new innovative retailer in the next Wheel of
Retailing cycle often initially coexists, with mature retail institutions,
which are at the highest popularity position in the previous wheel of
retailing cycle. For a mature institution to remain successful, Bennett
and Cooper (1984) suggested continuous self-development to create
new innovations for the mature retailer and, at the same time, sound
management of current operation practices.
WHEEL OF RETAILING
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RETAIL ACCORDION

Hollander (1966) proposed the Retail Accordion theory, which explained
retail evolution as a cyclical trend in terms of the number of merchandise
categories (i.e., product assortment). In this theory, at the beginning of
operation, a retail institution carries a broad assortment of but does not
carry a deep assortment (i.e., various styles within one product
classification).

At this early stage, the retail institution is a general store. As time passes,
the retail institution becomes specialized by carrying a limited line of
merchandise with a deep assortment. At this point, the retail institution is a
specialty store.
ENVIRONMENTAL THEORY
Many previous researchers have supported the Environmental theory of
retail evaluation. The common concept among previous research of the
Environmental theory is that the retail environment is the key influence
to retail changes, and to survive change and competition, retail
institutions need to evolve by adapting or adjusting to the
environmental changes (Blizzard, 1976; Brown, 1987; Gist, 1968; Oren,
1989).
Environmental theorists present the idea of retail institutions being
economic entities. Within such entities are retailers confronted with an
environment filled with customers, technology innovation and market
competitors. Retailers who meet the needs and demands of their
environment find success, while retailers who fail to do this plummet.
For this reason, it is important for retailers to be aware of and adjust to
changing environments.
ENVIRONMENTAL THEORY CONTINUED
 Gist (1968) predicted that retail evolution could occur only
when environmental variables positively affected retail
institutions. Having an environment favourable to a retail
institution highly enhanced the retail institution’s ability to
adapt to the environment.
 Brown (1987), Oren (1989), and Stevens (1975) mentioned
that a retailer’s ability for adaptation to the environment
was highly dependent on environmental conditions,
especially those of technology and economy, and this
ability would significantly affect the success of the
institution types’ retail evolution
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CONFLICT THEORY
Many researchers have proposed some form of a Conflict theory to
explain retail evolution (e.g., Berens, 1980; Bliss, 1967; Cauwe, 1979; Gist,
1968; Oxenfeldt, 1960; Schumpeter, 1947; Thomas, 1970).
Conflict theory is viewed as a series of phases that a retail company
endures when challenged by a competitor. During the first stage, the
retailer is shocked that such challenge has been presented. As a result,
many retailers retreat and attempt to sabotage the success of their
competitor. After being unsuccessful, the retailer will admit defeat and
create ways to improve their product or service. While the challenged
retailer is undergoing these stages, the challenger is also implementing
methods that will assist in company growth.
The progress of change means that everything must decline to make way for
new things, that nothing in nature or society is “fixed” or “sacred” since it
must share the process of transformation.
IN REAL TIME USES
 The use of retail theories vary over time for a number
or reasons. Since implementation of theories is largely
dependent on social and economic situations, high
and low consumer demand may influence retailers to
implement one theory over another. While a retailer
may find conflict theory helpful at times of low
demand, he or she may find this same retail approach
useless when consumer requests are relatively high.
Similarly, retailers use the theories to solve marginal
and supply complexities. The environment theory is
particularly helpful when factoring necessary marginal
increases. Components of the cyclical theory can
provide companies with alternatives when business is
not doing well.
THE RETAIL MIX
 Retail Mix is a method of combining different
retail variables in alternative ways to achieve a
high marketing strategy to attract the
customers. The different variables may include
product merchandising, price, promotion, store
location, resources and processes. In other words
retail mix is an approach in which retailers setup
their stores by mixing different retail variables to
attract the customers by offering different
services to yield the maximum profit.
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WHAT IT SHOULD PROVIDE
A perfect blend of the different retail
components within retail organization
determines high retail management strategy.
It Helps in building clear corporate mission
and sound business portfolio. Retail mix in
different types of stores gives different ideas
to retailers to establish, plan and build their
mission to move towards their goal.
PRODUCT
Product development - New product can be built to
compete with the existing product or to improve the
established product.
Product management Managing the developing,
marketing and sale of a set of products.
Branding - This is how the retailer attracts the
customers with good quality of goods with a name
to
the
product
PRICE
Developing a pricing strategy.
Quality - To provide quality products.
Profitability - To reach high profitability.
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PROMOTION
Sales promotion - Promoting the sale through
advertising.
Sales management - Managing sales through
different medias.
Direct marketing - Delivering direct
promotional messages to the customers.
STORE LOCATION
 Retailer image - Based on the type of retail store,
retailers can depict their image in order to attract
their target customers. This involves mixing of
different components such as infrastructure,
customer perception of the store and its
competitors.

Target market - Retailer targets the specific group of
customers which aims to provide services. They
consider different conditions like demographic,
geographic and psychographic information.
RESOURCES
Staff interaction - It is the sufficient human
resources that is required in a retail store to
interact with customers.
Internal marketing - It is the process where
higher level of management in the structure
motivates and empowers employees to
deliver a satisfying customer service.
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