RETAIL STRATEGIC PLANNING
W. Frank Dell II, CMC
September, 2004
AGENDA
INTRODUCTION
STRATEGY
TACTICS
OPERATIONS
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Objectives
 Define Retail Strategic
 Document components and elements
 Describe the development process
 Identify common mistakes
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Strategy Definition
A plan, method or series of
maneuvers for obtaining a
specific goal or result
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Overview
Corporate
Goals
Strategic
Plan
Tactical
Plan
Operations
Plan
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Time Horizon
DESCRIPTION
1
2
3
4
5
6
7
8
9
10
Corporate Goals
Strategy
Tactics
Operations
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Maslow Theory
SelfActualization
Esteem
Love, affection &
belonging, safety
Physicological
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AGENDA
INTRODUCTION
STRATEGY
TACTICS
OPERATIONS
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What Business?
Business
Products
Industrial
Consumer
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Type
Service
Wholesale
Retail
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Business Goals
 Sales
–
–
–
–
1 million
5 million
100 million
1 billion
 Geographic
–
–
–
–
City/Region
Country
Continent
World
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Market
Business
Competition
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Consumer is King
The Golden Rule
He who has the Gold (consumer) rules
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Which Consumer?
Buyer
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User/Customer
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Define the Target Market
 Sex
 Age
 Education
 Income
 Life Style
 Ethnicity
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Target Market - Sex
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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
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Target Market - Education
 No education
 Elementary School
 High School
 College / University
 Advanced Degree
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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
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Target Market – Life Style
 Vegetarian
 Diabetic
 Over-weight
 Health nut
 Active
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Target Market - Ethnicity
 Geographic region
 Race
 Religion
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Target Market
Sex
M
F
H
Age
I
J
Y
Education
No
Income
2.1 3.5
YA MAA SA
ES HS C/U AD
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Life Style
V
D
OW
Ethnicity
R
R
R
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10.5 14
H
17.5 18+
A
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Factor in Trends
 Aging population
 Growing Middle Class
 Changing Health & Life Style
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Elements – Format Size
How many formats & what size?
Receiving & Backroom
Processing
Merchandise Display
Office
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Customer Service & Checkout
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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
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Elements - Merchandising
Role




Destination
Routine
Occasional / Seasonal
Convenience
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Quality

Good

Better

Best
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Elements - Decor
 Fixtures
 Lighting
 Flooring
 Signage
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Elements - Services
 Checkout
– Cash
– Credit & Debit card




Sales assistance
Returns
Lay-A-Way
Gift Registry
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



Demonstrations
Sampling
Delivery
Installation
Education
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Brick Vs Click
Positives
 Additional Sales
 Brand building
 Reach larger target
market
 Lower investment
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Negatives
 Different business
 Delivery
 Divides resources
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Operating & Capital Models
Sales
- Cost of Goods
+
= Gross Margin
+
- Labor & Benefits
+
- Utilities
=
- Rent
- Advertising
Payback
- Taxes
= Profit
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Site
Store Construction
Fixtures
Merchandise
Capital Cost
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Validation
Target
Customer
Market
Strategy
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Competition
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AGENDA
INTRODUCTION
STRATEGY
TACTICS
OPERATIONS
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Overview
Advertising
(ABC)
Price
Discount
Display
POP
Season
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Advertising
Television
Radio
Magazine
Mail
Newspaper
Internet
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Pricing
Hi Lo
Seasonal
Everyday Low Price
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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
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Promotions
 Types – Unlimited
–
–
–
–
–
Price off
Buy one get one
Continuity
Coupons
Joint SKU
 Match target consumers desires
 Support strategic image
 Incorporate Frequent Shopper Program
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Location, Location, Location
 Where
– Work
– Live
– Play
 Travel mode
– Walk
– Drive
– Public transportation
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AGENDA
INTRODUCTION
STRATEGY
TACTICS
OPERATIONS
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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
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Human Resources
 Attract
 Educate and Train
 Evaluate
 Retain
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Logistics
 Inbound
– Store Vs Warehouse Delivery
– Method (truck, rail, water)
 Storage & Processing
– Number warehouse by commodity
– Location and size
 Outbound
– Frequency, distance, temperature
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Information Technology
 Hardware
– Processing power
– Security & back up
 Software
– Transaction processing
– Management control & reporting
– Analysis and planning
 Network
– Volume
– Distance
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Store Operations
 Consistently execute customer service
 Merchandise in-stock
 Train for expansion
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Commercial
 Selection
– Categories, Sub-Categories & Items
– Pricing & Promotion
 Inventory Turns
 Merchandise in-stock
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Finance & Accounting
 Manage cash
 Maintain budgets and controls
 Secure sufficient capital
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Summary
Corporate
Goals
Strategic
Plan
Tactical
Plan
Operations
Plan
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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
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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
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W. Frank Dell II, CMC
President
DELLMART & Company
125 Hardesty Road
Stamford, CT 06903 USA
Tel: 203-968-8609
Fax: 203-968-8613
e-mail: Frank@Dellmart.com
Web Site: www.Dellmart.com
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