RETAIL STRATEGIC PLANNING

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Presentation transcript:

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 DELLMART & COMPANY

Time Horizon DESCRIPTION 1 2 3 4 5 6 7 8 9 10 Corporate Goals Strategy   Strategy Tactics Operations DELLMART & COMPANY

Maslow Theory DELLMART & COMPANY

AGENDA INTRODUCTION STRATEGY TACTICS OPERATIONS DELLMART & COMPANY

What Business? DELLMART & COMPANY

Business Goals Sales Geographic 1 million 5 million 100 million 1 billion Geographic City/Region Country Continent World Market Business Competition DELLMART & COMPANY

Consumer is King The Golden Rule He who has the Gold (consumer) rules DELLMART & COMPANY

Which Consumer? Buyer User/Customer DELLMART & COMPANY

Define the Target Market Sex Age Education Income Life Style Ethnicity DELLMART & COMPANY

Target Market - Sex Household Female Male DELLMART & COMPANY

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 DELLMART & COMPANY

Target Market - Education No education Elementary School High School College / University Advanced Degree DELLMART & COMPANY

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 DELLMART & COMPANY

Target Market – Life Style Vegetarian Diabetic Over-weight Health nut Active DELLMART & COMPANY

Target Market - Ethnicity Geographic region Race Religion DELLMART & COMPANY

Target Market Sex M F H Age I J Y T YA MAA SA Education No ES HS C/U   Age I J Y T YA MAA SA Education No ES HS C/U AD Income 2.1 3.5 7 10.5 14 17.5 18+ Life Style V D OW A Ethnicity R DELLMART & COMPANY

Factor in Trends Aging population Growing Middle Class Changing Health & Life Style DELLMART & COMPANY

Elements – Format Size How many formats & what size? Receiving & Backroom Processing   Merchandise Display Office Customer Service & Checkout DELLMART & COMPANY

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 DELLMART & COMPANY

Elements - Merchandising Role Destination Routine Occasional / Seasonal Convenience Quality Good Better Best DELLMART & COMPANY

Elements - Decor Fixtures Lighting Flooring Signage DELLMART & COMPANY

Elements - Services Checkout Sales assistance Returns Lay-A-Way Cash Credit & Debit card Sales assistance Returns Lay-A-Way Gift Registry Demonstrations Sampling Delivery Installation Education DELLMART & COMPANY

Brick Vs Click Positives Additional Sales Brand building Reach larger target market Lower investment Negatives Different business Delivery Divides resources DELLMART & COMPANY

Operating & Capital Models Sales Cost of Goods = Gross Margin Labor & Benefits Utilities Rent Advertising - Taxes = Profit Site + Store Construction + Fixtures + Merchandise = Capital Cost Payback DELLMART & COMPANY

Validation DELLMART & COMPANY

AGENDA INTRODUCTION STRATEGY TACTICS OPERATIONS DELLMART & COMPANY

Overview DELLMART & COMPANY

Advertising Television Radio Magazine Newspaper Mail Internet DELLMART & COMPANY

Pricing Hi Lo Seasonal Everyday Low Price DELLMART & COMPANY

Categories Transaction Building - Higher price, impulse buy 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 DELLMART & COMPANY

Promotions Types – Unlimited Match target consumers desires Price off Buy one get one Continuity Coupons Joint SKU Match target consumers desires Support strategic image Incorporate Frequent Shopper Program DELLMART & COMPANY

Location, Location, Location Where Work Live Play Travel mode Walk Drive Public transportation DELLMART & COMPANY

AGENDA INTRODUCTION STRATEGY TACTICS OPERATIONS DELLMART & COMPANY

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 DELLMART & COMPANY

Human Resources Attract Educate and Train Evaluate Retain DELLMART & COMPANY

Logistics Inbound Storage & Processing Outbound Store Vs Warehouse Delivery Method (truck, rail, water) Storage & Processing Number warehouse by commodity Location and size Outbound Frequency, distance, temperature DELLMART & COMPANY

Information Technology Hardware Processing power Security & back up Software Transaction processing Management control & reporting Analysis and planning Network Volume Distance DELLMART & COMPANY

Store Operations Consistently execute customer service Merchandise in-stock Train for expansion DELLMART & COMPANY

Commercial Selection Inventory Turns Merchandise in-stock Categories, Sub-Categories & Items Pricing & Promotion Inventory Turns Merchandise in-stock DELLMART & COMPANY

Finance & Accounting Manage cash Maintain budgets and controls Secure sufficient capital DELLMART & COMPANY

Summary DELLMART & COMPANY

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 DELLMART & COMPANY

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 DELLMART & COMPANY

Thank You DELLMART & COMPANY

e-mail: Frank@Dellmart.com Web Site: www.Dellmart.com 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 DELLMART & COMPANY