Recent Trends in Canadian Retail
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Increased globalization
New store formats and locations
Increased use of technology
Channel blurring
Changing consumer behaviour
Special Characteristics
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Small average sales
Impulse purchases
Popularity of stores
Chapter 3
Strategic Planning in Retailing
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
Class Agenda

Discuss retail strategy and apply concepts to a
short case
How Retail Institutions are Evolving
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
Mergers, Diversification, Downsizing
Cost-Containment and Value-Driven Retailing
Figure 5.1 The Wheel of Retailing
Figure 5.3 Scrambled Merchandising
by a Shoe Store
Figure 5.4 Retail Life Cycle
Figure 1.10 Applying the Retail
Concept
Customer Orientation
Coordinated Effort
Value driven
Goal Orientation
Retailing
Concept
Retail
Strategy
Benefits of Strategic Retail Planning
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
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Opportunity for analysis
Direction
Coordination of the firm’s total efforts
Identify points of differentiation
Appeal to a group of customers
Anticipation and avoidance of crises
Figure 3.1 Elements of a Retail Strategy
Sobey’s Inc. Canada
Goals:
 Sales growth between 6 and 8 percent
 Operating earnings per share growth between
12 and 16 percent
 Companywide capital expenditures of
approximately $550 million to $600 million
 National share of requirements of 20 percent
 Maintenance of first-quarter supplier rating
Positioning Approaches

Mass merchandising is a positioning approach
whereby retailers offer a discount or valueoriented image, a wide or deep merchandise
selection, and large store facilities

Niche retailing occurs when retailers identify
specific customer segments and deploy unique
strategies to address the desires of those
segments rather than the mass market
Figure 3.7 Selected Retail Positioning Strategies
Target Market Identification

Three techniques
 Mass marketing
 Concentrated marketing
 Differentiated marketing
See Table 3-3 for a detailed comparison
The Positioning Approach of
High-End Jewellery Stores
Case #4, p. 74
The Positioning Approach of High-End Jewellery Stores
1.
2.
3.
4.
Positioning Chart – Jewellers
Blurred positioning?
Pros and cons of Tiffany’s low price strategy
How would you expect the total retail
experience to differ in Wal-Mart, department
stores and high-end retailers?
“It is critical … for a retailer to choose
his or her spots…to accept the notion
that you can’t be everything to
everyone.”
- Kevin Coupe, Morningnewsbeat.com
Overall Strategy Components
The Retailing Strategy Mix is a combination of:
 Product
 Price
Controllable Factors
 Location
 Communication
 Operations Management

Need to balance with uncontrollable environmental
and marketplace factors
Wal-Mart

Watch the Wal-Mart video and consider the elements of its
strategy.

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What does Wal-Mart do well?
Is Wal-Mart the perfect retailer?
Some interesting Wal-Mart sources:

http://walmart.feedroom.com/ifr_main.jsp?nsid=a653ba03d:10d9dd55f38:741f&fr_story=de9a09508999541804d6a74118c1601074156570&st=
1157994113989&mp=WMP&cpf=true&fr=060806_015729_wcf39d2
dx10bb4c7cfaexw6ebb&rdm=2762.328875758835

http://www.walmartfacts.com/FactSheets/

http://www.pbs.org/itvs/storewars/story.html
Retail Growth Strategies
Market Segment
Existing
Existing
New
Market
Penetration
Market
Development
Retail Format
Development
Diversification
Retail
Format
New
Consider Home Depot Growth

Classify the type of growth strategies
employed by Home Depot through:

Home Depot Canada
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Market development

Diversification 
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Multiple store openings in one market Market penetration
New stores opening in previously unserved markets
Smaller version stores for higher-end urban customers
Launch of their Canadian website Retail Format Dev.
Diversification
Expo Design Center
Takeaways

Developing a successful retail strategy requires:
 Careful analysis and planning
 Balancing controllable and uncontrollable
variables
 Accurately defining target market(s) and
satisfying their needs and wants
 Understanding your position in the market
 Coordinated effort
Q10
A retailer can become a _____ through low
prices, specialized products, a large selection,
and superb customer service.
a. destination retailer
b. relationship retailer
What is a parasite store?
c. parasite store
d. value-based retailer
Earning Destination Retailer Status
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Be price oriented and cost efficient
Be upscale
Be convenient
Offer a dominant assortment
Offer superior customer service
Be innovative or exclusive
Figure 3.1 Elements of a Retail Strategy
Overall Strategy Components
The Retailing Strategy Mix is a combination of:
 Product
 Price
Controllable Factors
 Location
 Communication
 Operations Management

Need to balance with uncontrollable environmental
and marketplace factors
Benefits of Strategic Retail Planning






Opportunity for analysis
Direction
Coordination of the firm’s total efforts
Identify points of differentiation
Appeal to a group of customers
Anticipation and avoidance of crises
How does Wal-Mart plan to grow?
Retail Growth Strategies
Market Segment
Existing
Existing
New
Market
Penetration
Market
Development
Retail Format
Development
Diversification
Retail
Format
New
Takeaways

Developing a successful retail strategy requires:
 Careful analysis and planning
 Balancing controllable and uncontrollable
variables
 Accurately defining target market(s) and
satisfying their needs and wants
 Understanding your position in the market
 Coordinated effort