A Strategic Planning Template For Retail Management

A detailed, user-friendly strategic planning template, Computer-Assisted Strategic Retail Management Planning, appears at our Web site (www.pearsonhighered.com/bermanevans). This template, based on Figure 3-1, enables you to build a strategic plan. You may apply the template to one of the scenarios provided—or devise your own scenario. You have the option of printing each facet of the planning process individually, or printing the full plan as an integrated whole.

Table 3-5 highlights the steps used in Computer-Assisted Strategic Retail Management Plan­ning as the basis for preparing a strategic plan. Table 3-6 presents an example of how the template may be used.

TABLE 3-5 Outline of the Computerized Strategic Planning Template

  1. Situation Analysis
  • Current organizational mission
  • Current ownership and management alternatives
  • Current goods/service category
  1. SWOT Analysis
  • Strengths: Current and long term
  • Weaknesses: Current and long term
  • Opportunities: Current and long term
  • Threats: Current and long term
  1. Objectives
  • Sales
  • Profit
  • Positioning
  • Satisfaction of publics
  1. Identification of Consumers
  • Choice of target market
  • Mass marketing
  • Concentrated marketing
  • Differentiated marketing
  1. Overall Strategy
  • Controllable variables
  • Goods/services strategy
  • Location strategy
  • Pricing strategy
  • Promotion strategy
  • Uncontrollable variables
  • Consumer environment
  • Competitive environment
  • Legal environment
  • Economic environment
  • Technological environment
  1. Specific Activities
  • Daily and short-term operations
  • Responses to environment
  1. Control
  • Evaluation
  • Adjustment

TABLE 3-6 Sample Strategic Plan: A High-Fashion Ladies Clothing Shop

Sally’s is a small, independently owned, high-fashion ladies clothing shop in a suburban strip mall. It is a full-price, full-service retailer for fashion-forward shoppers. It carries sportswear from popular designers, has a personal shopper for good customers, and has an on-premises tailor. Sally’s is updating its strategic plan to secure more funding for an expected expansion.

  1. Situation Analysis
  • Current organizational mission: A high-fashion clothing retailer selling high-quality and designer-label clothing and accessories in an attractive full-service store environment.
  • Current ownership and management alternatives: Sole proprietor, independent store.
  • Current goods/service category: Ladies coats, jackets, blouses, and suits from major designers, as well as a full line of fashion accessories (such as scarves, belts, and hats).
  1. SWOT Analysis
  • Strengths
    • Current
      • Loyal customer base.
      • Excellent reputation for high-fashion clothing and accessories within the community.
      • Little competition within a target market concerned with high fashion.
      • Acceptance by a target market more concerned with fashion, quality, and customer service than with price.
      • Unlike consumers favoring classic clothing, Sally’s fashion-forward customers spend a considerable amount of money on clothing and accessories per year.
      • Sally’s highly regarded personal shopper (who assembles clothing based on customer preferences, visits customers, and arranges for a tailor to visit customers).
    • Long term
      • Fashion-forward image with the store’s target market.
      • Exclusive relationships with some well-known and some emerging designers.
      • Low-rent location in comparison to a regional shopping center.
      • Excellent supplier relationships.
      • Loyal employees.
      • Excellent relationships within the community.
  • Weaknesses
    • Current
      • Difficulty in recruiting appropriate part-time personnel for peak seasonal periods.
      • Small store space limits selection. Too often, the tailor does major alterations.
      • Long delivery times for certain French and Italian designers.
      • Lack of a computer-based information system that would better enable it to access key information concerning inventory, sales, customer preferences, and purchase histories.
      • Limited expertise in social media.
    • Long term
      • Limited bargaining power with vendors due to small orders. This affects prices paid, as well as access to “hot-selling” clothing.
      • Suburban strip mall location reduces its trading area. There is little tourist trade.
      • Over-reliance on the owner-manager, and on several key employees.
      • No long-term management succession plan.
  • Opportunities
    • Current
      • Hire another experienced tailor to create a custom-made clothing department.
      • Hire an assistant to better coordinate trunk and fashion shows. This would solidify Sally’s reputation among fashion- forward shoppers and in the community.
      • Take over an empty adjacent store to increase size by 50 percent.
      • Enhance the Web site. This would enable it to appeal to a larger trading area, promote more events (such as a fashion show), and provide links to designers.
    • Long term
      • Larger store increases the ability to expand the number of designers, as well as the product lines carried. This would improve Sally’s bargaining power with suppliers.
      • Custom-made clothing department to appeal to customers who dislike “ready-to-wear apparel” and to customers with highly individualized tastes.
      • Expanded market due to enhanced Web site.
  • Threats
    • Current
      • Rumors that Bloomingdale’s, a fashion-based department store, may soon locate a new store within 10 miles of Sally’s. This could affect relationships with suppliers as well as customers. Bloomingdale’s offers one-stop shopping and has a flexible return policy for unaltered merchandise with its labels intact.
      • Local recession’s impact on revenues.
    • Long term
      • Many customers in their 50s and 60s. Some are close to retirement; others intend to spend more time in Florida and Ari­zona during the winter. The retailer needs to attract and retain younger shoppers.
  1. Objectives
  • Sales: Achieve sales volume of $4 million per year.
  • Profit: (a) Achieve net profit before tax of $300,000. (b) Increase inventory turnover from 4 times a year to 6 times a year. (c) Increase gross margin return on inventory (GMROI) by 50 percent through more effective inventory management.
  • Positioning: (a) Reposition store to appeal to younger shoppers without losing current clientele. (b) Increase acceptance by younger shoppers. (c) Establish more of a Web presence.
  • Satisfaction of publics: (a) Maintain store loyalty among current customers. (b) Increase relationship with younger designers selling less costly, younger apparel. (c) Maintain excellent relationship with employees.
  1. Identification of Consumers
  • Choice of target market approach
  • Mass marketing: This is not a mass-market retailer.
  • Concentrated marketing: This is Sally’s current target market strategy.
  • Differentiated marketing: Sally’s might consider attracting multiple target markets: its current fashion-forward customers seeking designer apparel and accessories in a full-service environment; younger, professional customers who desire more trendy clothing; and fashion-forward customers who desire custom-made clothing.
  1. Overall Strategy
  • Controllable variables
    • Goods/service strategy: Merchandise is fashion-forward from established and emerging designers. Fashion accessories include such items as scarves, belts, and hats. The retailer has no plans to sell ladies’ shoes or pocketbooks. Most of the designer merchandise is selectively distributed. A planned custom-made clothing department would enable Sally’s to attract hard-to-fit and hard-to-please shoppers. Custom-made clothing shoppers would have a wide variety of swatches and fashion books from which to choose.
    • Location strategy: Sally’s currently occupies a single location in a suburban strip mall. This site has comparatively low rent, is within 10 miles of 80 percent of the store’s customers, has adequate parking, and has good visibility from the road.
    • Pricing strategy: Sally’s charges list price for all of its goods. Included in the price are full-tailoring service, as well as a per­sonal shopper for major customers. Twice a year, the store has a 50 percent off sale on seasonal goods. This is followed by 70 percent off sales to clear the store of remaining off-season inventory.
    • Promotion strategy: Sally’s sales personnel are well-trained and highly motivated. They know key customers by name and by their style, color, and designer preferences. Sally’s plans to upgrade its regular fashion and trunk shows where new styles are exhibited to current customers and potential customers. Sally’s also maintains a customer database. The best customers are called when suitable merchandise arrives and are allowed to preview it. Some other customers are contacted by mail. The improved Web site will feature the latest styles, the Web address of major designers, color availability, and more. Sally’s has a display listing in the Yellow Pages.
  • Uncontrollable variables
    • Consumer environment: Business is subject to the uncertainty of the acceptance of new fashions by the target market. Although Sally’s wants to attract two additional segments (custom-made clothing buyers and younger buyers), there is no assurance that it will be successful with these target markets. The store needs to be careful that in seeking these new seg­ments, it does not alienate its current shoppers.
    • Competitive environment: The rumored opening of a fashion-oriented department store in the area would significantly affect sales.
    • Legal environment: Sally’s is careful in fully complying with all laws. Unlike some competitors, it does not eliminate sales taxes for cash purchases or ship empty boxes out-of-state to avoid sales tax.
    • Economic environment: Local recessions can reduce sales substantially.
    • Technological environment: Sally’s is in the process of investigating a new retail information system to track purchases, inventories, credit card transactions, and more.
  1. Specific Activities
  • Daily and short-term operations: Sally’s matches competitors’ prices, promptly corrects alteration issues, has longer store hours in busy periods, and offers exclusive merchandise.
  • Responses to environment: Sally’s acts appropriately with regard to trends in the economy, competitor actions, and so forth.
  1. Control
  • Evaluation: A new retail information system will better enable Sally’s to ascertain fashion trends, adjust inventories to reduce mark- downs, and contact customers with specific offerings. Sales by color, size, style, and designer will be more carefully monitored.
  • Adjustment: The retail information system will enable Sally’s store to reduce excess inventories, maximize sales opportunities, and better target individual customers.

Source: Barry Berman, Joel R Evans, Patrali Chatterjee (2017), Retail Management: A Strategic Approach, Pearson; 13th edition.

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