Summary: Retail planning is a type of business process for developing a data-based strategy to meet customer demand and increase the return on investments (ROI). Follow this comprehensive step-by-step strategic retail planning process to improve your procedures and streamline your retail growth.
Achieving any objective requires a strategic plan, which can be tricky and often confusing for beginners. It’s just like you have a blank canvas, you know the output, but you don’t where to start.
If you are an entrepreneur who frequently gets stuck on questions like:
Then you have landed at the right place!
Here, in this article, we’ll be discussing strategic retail planning for your business.
Retail planning’s objective is to identify what, how much, and where a retailer is planning to sell during a particular timeframe while also maximizing the return on investment (ROI).
It consists of multiple interrelated activities like Strategic Planning, Merchandise Financial Planning (MFP), Assortment Planning (AP), etc., done by merchants or planners in a retail business.
Most of these activities are supported by demand forecasts that involve plan seedling and sales revisions related to promotions or trends changes in consumer shopping habits.
Retail planning might feel like a linear procedure, but, in many cases, different planning procedures are followed based on where the retailer is in its planning calendar.
So, let’s begin by understanding what strategic planning in retailing actually means.
In a strategic retail planning process, a business identifies and sets its goals for a definite period and prepares a strategic plan to achieve them efficiently. The right strategic plan will help you bridge the gap between where you are right now and where you want to be.
This determines the first step of the strategic retail planning process: Defining Goals
The strategic retail planning process starts with self-analysis and market research. Next, you need to understand your consumer behavior to plan and design strategies accordingly.
Lastly, you will have to implement and analyze your retail planning strategies. Here are the detailed retail planning process steps that you need to follow to create and implement effective strategies.
The journey of strategic planning in retailing process starts with self-analysis to understand where your business stands right now. After having a clear picture of where you are currently you need to focus on where you want to reach, i.e., set clear goals for your business.
You can begin by defining micro-goals for each department and then macro-goals for the business. Ensure that whatever goals you set, whether micro or macro, must be SMART:
Setting SMART goals will ensure that all your teams are focused on achieving realistic and measurable goals. For example, increasing sales in the last quarter by 7%. This has a measurable target to be achieved in a definite time.
Conducting market analysis means analyzing your competitors, their products, marketing strategies, shortcomings, customer satisfaction rate, and so on. It will help you to bridge the gap between customers’ expectations and the products available in the market.
Moreover, market analysis will help you understand the market demographics, current trends, and customer segmentation. This will help you in analyzing any risks or opportunities and preparing for them.
Getting insights into your consumer behavior will give you clarity of their preferences, buying patterns, and spending habits. It will ensure that you attract the right pool of people to your business. Consumer analysis will help you in understanding them better, their needs, their expectations, and different influential factors behind their purchasing decisions.
This way, you can design a customized marketing campaign that will ensure market penetration. Customer analysis can be done by conducting a SWOT analysis to understand strengths, weaknesses, opportunities, and threats.
You can also look at past historical sales data to forecast future inventory requirements. This will also help you find out about what products customers like to shop for. Moreover, you can also communicate with your existing customers to find out what drives their purchasing power.
Now that you have thoroughly understood the market and your customers, it’s time to design and implement your retail strategies to achieve SMART goals. While designing your next retail strategy, consider your retail positioning, whether you want to continue with the same market positioning or create a new customer base.
You can incorporate the 7 Ps of marketing to formulate your retail strategy:
Your retail strategy should not only focus on attracting a maximum number of prospects to your business but also to provide clarity of what they expect. The main source of attraction can be competitive pricing, quality, distinct features, WOW experience, or anything that is your brand’s USP.
Now when you have your long-term retailing strategy in front of you, break it into small, short-term actionable strategic plans. For example, it’s Christmas time and now you can divert everything from your store’s look and feel to your digital campaigns towards the same theme and then announce festive offers.
Although it may elevate your sales for the festive season, it will contribute to your annual sales. Another benefit of implementing short-term strategic plans is that you can test-fire for your long-term strategic plan. If you find any loopholes in meeting customer expectations, they can be immediately rectified.
After having a successful test run with short-term strategies, it’s finally time to implement the strategic retail growth plan. Testing these strategies would help you in finding out whether they are performing or not.
For example, imagine your goal is to increase the foot traffic in your new retail location by 10% in the upcoming quarter. And, you want to experiment with your retail space planning. Then, you can try a unique layout of the store and visual displays as part of the strategy.
But this will not be a cakewalk!
Employees may be reluctant to adopt new methods and technologies, but with the right training and counseling, it can all be done. Offering incentives, bonuses, and additional benefits can help in overcoming reluctance and even encourage them to take up new roles and responsibilities with enthusiasm.
Retail strategies may or may not always churn out the expected results.
It is imperative that implemented retail strategies should be keenly monitored at regular intervals. If any errors or difficulties are found, then they should be rectified on time. Analyzing the performance will also help you in preparing for future strategies and not repeating the same mistakes.
So, do you think every business should strategize retail planning? The answer is YES! Strategic planning for a retail business is highly imperative to keep the business and organizational activities clear and focused towards SMART goals.
Along with this, strategic retail planning offers you financial benefits, where you strategize, study your market and consumers, and ensure that you invest your resources efficiently. It provides you with an edge over your competitors.
It helps recognize their shortcomings and fill market gaps with your products. It gives a reality check of what consumers want. Moreover, strategic retail planning helps you prepare for the future and practice risk management for uncertain times.
Suggested Read: Grocery POS Software for Your Retail Business
In the strategic retail management process, an organization identifies and formulates its goals. Next, it prepares a strategic plan to achieve the goals effectively.
The retail market strategy process is a roadmap for a retailer to achieve its goals. It outlines how the business will attract its customers, sell products, and ultimately survive in the competitive landscape.
Some of the best examples are examples of strategic retail planning are creating a festive-themed storefront, designing a social media campaign to promote discounts that drive your potential customers to the store. Other examples are training your employees to adapt to new technologies and strategies.
Running online campaigns on different social media campaigns and Goggle can be an example of a strategic planning process for global retailing.
7 major steps involved in developing retail strategy:
1) Identify your Objectives
2) Analyze your Market
3) Understand your customer
4) Plan Retail Strategies
5) Focus on Short-Term Strategic Plans
6) Implement the Strategies
7) Analyze your Performance
Retail planning is important to have clarity about business goals that helps other teams to work dedicatedly in achieving the desired outcome.
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