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RETAIL STRATEGIC PLANNING

RETAIL STRATEGIC PLANNING. W. Frank Dell II, CMC September, 2004. AGENDA. INTRODUCTION STRATEGY TACTICS OPERATIONS. Objectives. Define Retail Strategic Document components and elements Describe the development process Identify common mistakes. Strategy Definition.

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RETAIL STRATEGIC PLANNING

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  1. RETAIL STRATEGIC PLANNING W. Frank Dell II, CMC September, 2004

  2. AGENDA INTRODUCTION STRATEGY TACTICS OPERATIONS DELLMART & COMPANY

  3. Objectives • Define Retail Strategic • Document components and elements • Describe the development process • Identify common mistakes DELLMART & COMPANY

  4. Strategy Definition A plan, method or series of maneuvers for obtaining a specific goal or result DELLMART & COMPANY

  5. Overview DELLMART & COMPANY

  6. Time Horizon DELLMART & COMPANY

  7. Maslow Theory DELLMART & COMPANY

  8. AGENDA INTRODUCTION STRATEGY TACTICS OPERATIONS DELLMART & COMPANY

  9. What Business? DELLMART & COMPANY

  10. Business Goals • Sales • 1 million • 5 million • 100 million • 1 billion • Geographic • City/Region • Country • Continent • World Market Business Competition DELLMART & COMPANY

  11. Consumer is King The Golden Rule He who has theGold (consumer) rules DELLMART & COMPANY

  12. Which Consumer? Buyer User/Customer DELLMART & COMPANY

  13. Define the Target Market • Sex • Age • Education • Income • Life Style • Ethnicity DELLMART & COMPANY

  14. Target Market - Sex Household Female Male DELLMART & COMPANY

  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 DELLMART & COMPANY

  16. Target Market - Education • No education • Elementary School • High School • College / University • Advanced Degree DELLMART & COMPANY

  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 DELLMART & COMPANY

  18. Target Market – Life Style • Vegetarian • Diabetic • Over-weight • Health nut • Active DELLMART & COMPANY

  19. Target Market - Ethnicity • Geographic region • Race • Religion DELLMART & COMPANY

  20. Target Market DELLMART & COMPANY

  21. Factor in Trends • Aging population • Growing Middle Class • Changing Health & Life Style DELLMART & COMPANY

  22. Elements – Format Size • How many formats & what size? DELLMART & COMPANY

  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 DELLMART & COMPANY

  24. Role Destination Routine Occasional / Seasonal Convenience Quality Good Better Best Elements - Merchandising DELLMART & COMPANY

  25. Elements - Decor • Fixtures • Lighting • Flooring • Signage DELLMART & COMPANY

  26. Checkout Cash Credit & Debit card Sales assistance Returns Lay-A-Way Gift Registry Demonstrations Sampling Delivery Installation Education Elements - Services DELLMART & COMPANY

  27. Positives Additional Sales Brand building Reach larger target market Lower investment Negatives Different business Delivery Divides resources Brick Vs Click DELLMART & COMPANY

  28. Sales Cost of Goods = Gross Margin Labor & Benefits Utilities Rent Advertising - Taxes = Profit Site + Store Construction + Fixtures + Merchandise = Capital Cost Operating & Capital Models Payback DELLMART & COMPANY

  29. Validation DELLMART & COMPANY

  30. AGENDA INTRODUCTION STRATEGY TACTICS OPERATIONS DELLMART & COMPANY

  31. Overview DELLMART & COMPANY

  32. Advertising Television Radio Magazine Mail Newspaper Internet DELLMART & COMPANY

  33. Pricing Hi Lo Seasonal Everyday Low Price DELLMART & COMPANY

  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 DELLMART & COMPANY

  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 DELLMART & COMPANY

  36. Location, Location, Location • Where • Work • Live • Play • Travel mode • Walk • Drive • Public transportation DELLMART & COMPANY

  37. AGENDA INTRODUCTION STRATEGY TACTICS OPERATIONS DELLMART & COMPANY

  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 DELLMART & COMPANY

  39. Human Resources • Attract • Educate and Train • Evaluate • Retain DELLMART & COMPANY

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

  41. Information Technology • Hardware • Processing power • Security & back up • Software • Transaction processing • Management control & reporting • Analysis and planning • Network • Volume • Distance DELLMART & COMPANY

  42. Store Operations • Consistently execute customer service • Merchandise in-stock • Train for expansion DELLMART & COMPANY

  43. Commercial • Selection • Categories, Sub-Categories & Items • Pricing & Promotion • Inventory Turns • Merchandise in-stock DELLMART & COMPANY

  44. Finance & Accounting • Manage cash • Maintain budgets and controls • Secure sufficient capital DELLMART & COMPANY

  45. Summary DELLMART & COMPANY

  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 DELLMART & COMPANY

  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 DELLMART & COMPANY

  48. Thank You DELLMART & COMPANY

  49. 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 DELLMART & COMPANY

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