This document discusses retail strategy and its key elements. Retail strategy identifies a retailer's target market, retail format to satisfy that market, and basis for sustainable competitive advantage. It provides examples of target markets, formats, and advantages for retailers like Starbucks, Cabelas, Kohls and Menards. More sustainable competitive advantages include customer loyalty, exclusive merchandise, and efficient supply chain management, while less sustainable advantages include lower prices and more promotions. Developing strong vendor relationships and private labels as well as superior customer service can also help retailers gain competitive advantages.

1. Retail Strategy

2. What is Retail Strategy?
• It is a statement identifying:
– 1. The retailer’s target market
– 2. The format the retailer plans to use to
satisfy the target market’s needs
– 3. The base upon which the retailer plans to
build a sustainable competitive advantage.

3. Elements in Retail Strategy
• Target Market
– Market segment towards which the retailers
plan to focus its resources and retail mix
• Retail Format
– Describes the nature of the retailer’s
operation (retail mix)
• Sustainable Competitive Advantage
– Advantage over the competition that is not
easily copied and thus can be maintained
over a long period of time

4. Examples of Retail Strategy
• What is the target market, retail format and
competitive advantage of the following:
– Starbucks
– Cabelas
– Kohls
– Menards

5. Target Market and Retail
Format

6. Sources of Competitive
Advantage
More Sustainable Less Sustainable
• Location • Better Computers
• Customer Loyalty • More Employees
• Customer Service • More Merchandise
• Exclusive Merchandise • Greater Assortments
• Low Cost Supply Chain • Lower Prices
Management • More Advertising
• Information Systems • More Promotions
• Buying Power with Vendors • Cleaner Stores
• Committed Employees

7. Developing a Sustainable
Competitive Advantage

8. Bases for Competitive
Advantage
Retail Firm
•Low Cost
•Large Size
•Efficient
Distribution,
Vendors, Operations
Suppliers • Unique Customer
Knowledge s
• Loyal Employees
Sources of
Capital

9. Positioning

10. Customer Loyalty
• Retailer can build loyalty through:
– 1. Developing a strong brand image for the
retailer or its private label brands
– 2. Develop a clear and precise positioning
strategies
– 3. Creating an attachment with customers
through a loyalty program

11. Private Labels
• Sears’ Kenmore – appliances
• Kmart’s Martha Stewart -- home
• JCPenney’s Arizona -- jeans

12. Vendor Relations
With a good vendor relationship you may
gain exclusive rights:
• 1. Sell merchandise in a specific region
• 2. Obtain special terms of purchase that
are not available to other competitors
• 3. Receive popular merchandise in short
supply

13. Customer Service
• Offering good service
– Polite service
– Service is efficient
– Store is neat and tidy
• Well trained employees