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RETAIL STRATEGIC

PLANNING

W. Frank Dell II, CMC


September, 2004

AGENDA
INTRODUCTION
STRATEGY
TACTICS
OPERATIONS

DELLMART & COMPANY

Objectives
Define Retail Strategic
Document components and elements
Describe the development process
Identify common mistakes

DELLMART & COMPANY

Strategy Definition

A plan, method or series of


maneuvers for obtaining a
specific goal or result

DELLMART & COMPANY

Overview
Corporate
Goals
Strategic
Plan
Tactical
Plan
Operations
Plan

DELLMART & COMPANY

Time Horizon
DESCRIPTION

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Corporate Goals

Strategy

Tactics

Operations

DELLMART & COMPANY

Maslow Theory
SelfActualization

Esteem

Love, affection &


belonging, safety

Physicological

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AGENDA
INTRODUCTION

STRATEGY
TACTICS
OPERATIONS

DELLMART & COMPANY

What Business?
Business
Products
Industrial

Consumer

DELLMART & COMPANY

Type
Service

Wholesale

Retail

Business Goals
Sales

1 million
5 million
100 million
1 billion

Geographic

City/Region
Country
Continent
World

DELLMART & COMPANY

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

Age

Education

No

Income

2.1 3.5

YA MAA SA

ES HS C/U AD
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Life Style

OW

Ethnicity

DELLMART & COMPANY

10.5 14
H

17.5 18+

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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

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
Site
- Cost of Goods
+
= Gross Margin
+
- Labor & Benefits
+
- Utilities
=
- Rent
- Advertising
Payback
- Taxes
= Profit
DELLMART & COMPANY

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

Newspaper

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Radio

Magazine

Mail
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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