Retail Management: A Strategic

Approach
Thirteenth Edition

Chapter 20
Integrating and
Controlling the
Retail Strategy

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Learning Objectives
20.1 To demonstrate the importance of integrating a retail
strategy
20.2 To examine four key factors in the development and
enactment of an integrated retail strategy: planning
procedures and opportunity analysis, defining
productivity, performance measures, and scenario
analysis
20.3 To show how industry and company data can be used in
strategy planning and analysis (benchmarking and gap
analysis)
20.4 To show the value of a retail audit
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Planning Procedures
Outline the firms overall direction and goals
Combine top-down plans and bottom-up/horizontal plans
Enact specific plans, including checkpoints and dates

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Global Retail Development Index
Market attractiveness
Country risk
Market saturation
Time pressure

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Performance Measures
Total sales Operating income
Average sales per store Inventory turnover
Sales by goods/ service Markdown percentages
category
Employee turnover
Sales per square foot
Financial ratios
Gross margins
Profitability
Gross margin return on
investment

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American Customer Satisfaction
Index (ACSI)
Are customer satisfaction and evaluation of quality
improving or declining in the United States?
Are these attitudes improving or declining for particular
sectors of industry and specific companies?

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Measuring Service Retailing-SERVQUAL
Reliability dependable and accurate
Responsivenessprompt service
Assurance instill confidence in customers
Empathy caring, in best interests of customers
Tangibles visually appealing facilities

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Outrage, Satisfaction and Delight
Outrage occurs when must-be attributes are not met.
Must-bees include adequate parking, advertised goods
in stock, etc.
Satisfaction occurs when expectations are met or
exceeded. Under-promise, over-deliver.
Delight occurs when positive, surprise and memorable
activities occur. Problem with need to constantly
surprise consumer to garner his/her delight.
Both outrage and delight have high levels of word-
of mouth communication

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Figure 20.5 Utilizing Gap Analysis

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Table 20.3 ABC STORES: Internal
Benchmarking and Gap Analysis

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Minimizing Gaps
Customer insight
Customer profiling
Customer life cycle
Extended business model
Relationship program planning and design
Implementation

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Figure 20.6 The Retail Audit Process

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Criteria of Good Audits
Audits are conducted regularly.
In-depth analysis is involved.
Data are amassed and analyzed systematically.
An open-minded, unbiased perspective is maintained.
There is a willingness to uncover weaknesses to be
corrected, as well as strengths to be exploited.
Decision makers are responsive to the recommendations
made in the report.

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Undertaking an Audit
Determining who does the audit
Company audit specialists(internal employees)
Company department managers
Outside auditors (paid consultants)
Determining when and how often the audit is conducted.
Determining areas to be audited
Horizontal, vertical

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Obstacles to Doing a Retail Audit
An audit may be costly.
It may be time-consuming.
Performance measures may be inaccurate.
Employees may feel threatened and may not cooperate
as much as desired.
Incorrect data may be collected.
Management may not be responsive to the findings.

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