Retail Strategy Consulting
What is a Retail Strategy? Why does it matter?
Think of retail strategy as an elaborate scheme showing how a retail firm aims to run the business and accomplish its targets. Thus, a retail strategy is an integrated composite of several independent strategies addressing different areas of a business as per its unique requirements. These strategies provide an understanding of how the respective areas should be managed. They provide a sense of direction in action and serve as a guide for resource prioritisation and allocation. These strategies are directly and indirectly responsible for creating a competitive edge and also carry implications on customer experience and business growth and expansion endeavours. Last but not least, they provide directions for taking a business to profitability in a planned and systematic way.
Ten Key Strategies in Retail and How YRC Can Help
People Strategy
How people are managed by retail businesses has operational and strategic ramifications. In the long run, their people strategy also influences their plans for growth and expansion.
Employees play a big role in shaping customer experience and customer loyalty. Not having the right skills and competencies can hamper the quality of services they provide to customers. The performance of employees is also affected by engagement, work culture, leadership, mentoring and training, compensation, and PMS. All these aspects are important parts of the people strategy.
As a part of our strategic retail consulting services, we help clients formulate strong people strategies by incorporating and treating the necessary facets of people management within the design of organisational structuring and defining the job descriptions and KPIs (Key Performance Indicators). Our robust and flexible organisational designs and structures are curated not only to meet the prevailing employee-related organisational and business requirements but also to support scale and expansion in the future.
In defining job descriptions, we take into account a myriad of factors. These include (not limited to) business model requirements, functional aspects, business processes, operational standards, roles and responsibilities, reporting, and regulatory conditions.
In establishing KPIs, we strive to bring performance measurement metrics in stronger correlations with the planned results securing higher levels of certainty (or deviation thereof) from what is intended to be achieved. Here, we define the Critical Success Factors (CSFs), explain how the metrics should be monitored and reported, and map the possible alternatives for course corrections.
Technology Strategy
No retail business strategy expert or any experienced retail strategy firm would recommend jumping onto implementing technological solutions without a technology strategy. Having a technology strategy helps bring clarity to the role of technology in a business and the specific operational and strategic results it intends to achieve with technology. Now, for example, RFID sensors and IoT applications are great technologies but getting them without justifiable business reasons would render them less meaningful and may not deliver good ROI. On the other hand, getting the right technologies, in required shapes and forms, helps retail enterprises achieve critical goals like achieving operational efficiency, incorporating automation in areas like customer support, precision in demand forecasting, and formulation of more effective personalisation strategies.
In technology consulting, we help clients define the role of technology in running and empowering their businesses with operational and strategic leverages. We help formulate the technology strategy, map the course of implementation, and provide implementation assistance.
Another service area of ours is technology integration. As new technologies must be integrated with the current operations planning and technology infrastructure, our SOP-IT integration services allow businesses to achieve this. In addition to assistance in vendor selection, we also work closely with selected vendors for a smooth data migration process and making solutions ready for use.
Omnichannel Retail Strategy
Today, customers anticipate that omnichannel shopping features will be there. Customers find it easier to shop with the features of both online and offline channel capabilities. Given the option, customers no longer confine themselves to one channel. Today, customer shopping journeys tend to zigzag between online and offline channels and touchpoints depending on their established behaviour as well as real-time needs. Without an omnichannel strategy in place, it gets difficult to offer a seamless and integrated shopping journey cutting across channels and to achieve and sustain the intended quality of customer experience.
We approach omnichannel considering both the ends i.e. business and customers. Why? This is because businesses have to think in terms of budgets, operations, people, technology, supply chain, inventory management and other internal capabilities. From the customers’ end, there are factors (both online and offline) like brand visibility, advertisements and promotions, brand perception, employee behaviour, ease of access, using a brand’s website/app, checkouts, returns and refunds, customer support, etc.
Supply Chain Strategy
Retail enterprises need a supply chain strategy to achieve many short and long run objectives like meeting the evolving nature of customer expectations, adjusting to changes in market demand, delivering high-quality customer experience, improving competitiveness, cost optimisation, driving sales and profitability, achieving improved agility and resilience to deal with disruptions, better working coordination with suppliers, striving for growth and expansion, and on an overall – keeping their supply chain management in tandem with business requirements and prerogatives.
YRC’s experience, expertise and methodologies enable us to formulate robust yet agile supply chain strategies for retail clients. We understand the significance of a third-party perspective in assessing supply chain situations and coming up with innovative solutions. We begin with understanding clients’ business and supply chain requirements first – both strategic and operational. We carry out extensive assessments of the prevailing supply chain systems and operations. Our working methodologies are inspired by the principles of fundamental concepts like Kaizen, Lean, Six Sigma, Poka-Yoke, and ToC (Theory of Constraints). In retail strategy consulting, we recommend best-fit IT solutions and provide implementation assistance as well.
Sales & Marketing Strategy
The sales and marketing strategy of a retail enterprise determines its success with customer acquisition and retention, driving sales and profitability, enhancing competitiveness, and empowering the business for growth and expansion in the future. For example, customer acquisition and retention are directly influenced by how well a business is able to attract customers, build brand awareness, enhance engagement, and win and sustain customer trust and loyalty. These things are dealt with in a sales and marketing strategy. It also deals with strategies for increasing footfall, increasing conversion rates, creating distinction from competitors, effective use of different distribution channels, etc.
As a part of our strategic retail consulting services, our team carries out objective research and analysis of the existing situation where they try to understand the business model, offerings and UVPs, target demographics, consumer behaviour, customer journeys, markets, competition, and past performances. This is basically a move to understand how a client is currently pushing its sales and marketing efforts under the existing circumstances. We revisit and reframe these elements with a fresh and innovative perspective. For example, we evaluate the effectiveness of the existing value propositions. If value propositions are not in place, investing in promoting values customers are not seeking may render such investments ineffective. The same is true if target demographics are mistaken.
Infrastructure Strategy
In retail, the physical infrastructure refers to the component of physical space (management and strategies) where business operations are carried out. It typically covers offices, stores, and warehouses or fulfilment centres. The underlying strategies and the management of this physical infrastructure have important ramifications on operations, commercial viability, and the prospects of scale and expansion in the future.
Store layout planning is another crucial part of the infrastructure strategy in retail. Store layout affects:
- customer experience
- customer service
- space optimisation
- visual merchandising and planogram
- safety and security (for people, inventory, and assets)
- shelf management
- navigation
- operational efficiency
- checkout
- brand positioning
In retail infrastructure strategy, we assist clients in formulating the location strategy and layout planning.
In location strategy and analysis, we carry out extensive studies on a wide range of factors covering target demographics, market conditions, dynamics of accessibility, visibility, traffic, parking, real estate prices, space availability, regulatory compliance, safety and security, suitability for inventory management, and compatibility with supply chain operations.
In layout planning, we evaluate a wide range of factors before beginning to zero down on a final set of alternatives. Some of the broad factors we take into account are:
- Customer Experience
- Localisation
- Assortment Mix
- Zone Classification
- Space Optimisation
- Motion Analysis
- Support to inventory management
- Safety and Security
- Checkout
Customer Experience (CX) Strategy
In retail, a robust CX strategy is critical for fostering customer loyalty, encouraging repeat visits and purchases, promoting brand advocacy, boosting word-of-mouth marketing, gaining and sustaining an edge over competitors, driving growth in sales and revenue, and generating meaningful feedback and user-generated content. A good experience encourages customers to repeat or recommend it. A car may not be purchased again and again but a satisfied customer is likely to recommend it to a family or friend or leave positive feedback on third-party online platforms or share the same on their personal social media accounts. Of course, a poor product cannot be compensated with an emphasis on customer experience. But even a good product can fail to impress a customer if the aspect of the experience is not up to mark.
We, at YRC, recognize the shades and complexities of CX. We adopt a planned and systematic approach to formulating CX strategies. Our first prerogative is to understand clients’ business goals and objectives, what they want to accomplish with a superior customer experience, what is their intended brand positioning, and what they want CX to reflect. These inputs are crucial as they provide the benchmarks against which the existing levels of CX are evaluated. For determining the current CX landscape, we map the customer journey and identify the touchpoints supported by analysis of customer reviews, collection of customer feedback, conduct of internal assessments, and create simulations of customer journeys. There are a host of other steps and actors involved towards finally coming up with a robust CX strategy. We ensure that the requirements of delivering a superior customer experience are duly embedded in all the relevant areas of planning and operations.
Merchandising & Category Strategy
In a summarising way, merchandising is about how offerings (typically, products) are chosen, displayed, presented, and promoted in a retail store. Merchandising plays an important role in the sustainability and success of retail enterprises which heightens the significance of merchandising strategies. Formulating a merchandising strategy is a long and detailed process where we factor in product selection and assortment, category management, supplier selection and procurement planning, inventory management, store layout design, staff training, and other relevant elements.
Category management is closely related to merchandising but it is often treated as a different subject. It concerns the classification of products into distinct categories for better management and performance. In formulating category strategies, we take into account key factors like consumer behaviour, strategic significance, operational suitability, and the roles, tactics, and performance for each category.
Franchising and Own Store Expansion Strategy
Three broad ways to approach business growth and expansion are the organic, inorganic, and hybrid routes. Organic strategies include internal options like expanding the network of stores, expansion of offerings, introducing new products, etc. The second option is inorganic routes. The third option is hybrid strategies like franchising. Our service area in retail development strategy is helping retail clients develop their growth and expansion strategies.
In franchising business solutions, our role goes beyond formulating franchising strategies. We provide comprehensive assistance from planning to implementation:
- Franchise expansion strategy development
- Franchise business model development
- Franchise business plan development
- Franchise operations planning
- Franchise partner search
- Drafting franchise agreements
- Franchise audit manuals
In store expansion strategy, we adopt a similar approach as cited above but some of the elements we would like to highlight are:
- Location strategy
- Store layout planning
- Identification of best-fit IT solutions
- SOP-IT integration
- Organisational restructuring
- Redefining job descriptions
- Rewriting business processes
Finance Strategy
A finance strategy is necessary for retail enterprises to effectively and efficiently procure, allocate, utilise, and keep track of their financial resources. As a part of our strategic retail consulting services, we undertake the following in developing finance strategies:
- Determination of CAPEX and OPEX requirements
- Demand forecasting
- Projection of sales & revenue and profit & loss
- Cash flow estimation
- ROI and break-even analysis
- Calculation of necessary financial ratios
About Your Retail Coach
YRC is a retail and eCommerce consulting enterprise with a global outreach. With a team of competent and experienced professionals, we strive to be recognised as one of the world’s best retail strategy consulting firms.
To learn more about our retail strategy consulting services, feel free to drop us a message: one of our retail consultants will shortly reach out to you.
For more on retail strategy consulting services and solutions, please explore our service pages.
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