Being in a retail business, if the questions like what, when, where, and who to sell are always on your mind, then this read is especially for you. Post this read, you will have an obvious idea of how to plan your merchandise and how to set your market venture. Therefore, without much delay, let’s understand what a retail planning process is and how to implement it in practical life.
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What is the Retail Planning Process?
In the retail planning process, the retailer clearly defines the aim of the business and works on a strategic plan for attaining these objectives while maintaining a strong foothold in the competitive market. A well-designed and executed strategic plan saves a lot of time and other resources.
What are the 7 Steps of the Retail Planning Process?
1. Identify the objectives
At the micro-level, the goals are set for each department, and at the macro level, the goals are set for the entire business. For example, when the government invites bids, the goal of the company is to get the contract, whereas the goal of the individual departments of the company is to improve their performance for sales, production, and more, respectively.
The departmental goals are more specific and time-bound as compared to overall business goals. Therefore, there are bi-monthly or monthly targets set for each department of any organization. The setting of goals provides the employers and the employees a more focussed path that needs to be traversed for achieving the objectives at all levels. Make sure that the set SMART goals are Specific, Measurable, Attainable, Relevant, and Time-based.
2. Make a market analysis and situational analysis
Analysis of the market and situation helps the retailer to get answers to his questions on how to sell and when to sell. For this purpose, a detailed analysis of the internal and external factors affecting the business is to be studied. Internal factors are controllable and are based on the in-house working conditions. Whereas, external factors are more often uncontrollable.
Have a look at the image below to understand the qualitative and quantitative analysis of the factors that influence the strategic retail planning process of any organization.
3. Research on the consumer buying behavior
Good research work related to the target audience provides the much-needed flexibility in planning. Therefore, the retailer needs to research all the ways which can help him in attaining the business goals. There is always more than one way of achieving the goals, and only a good level of research can help a retailer identify these ways. Some ways are more modern and trending while others are traditional. Study the factors that influence consumer buying behavior in a specific industry for a better understanding of the concept.
Apart from researching multiple ways of providing retail customer service, one also needs to filter how it can be worked on smoothly. Once the multiple ways have been shortlisted, evaluate them based on their strength, weakness, opportunity, and threat. This means conducting their respective SWOT analysis.
4. Plan the retail strategies
Once you have set your objectives and identified your market position and retail mix, it’s time to plan your relative retail strategy. Ideally, your retail strategic plan is the one that is the most profitable. Before you choose your retail strategy, keep in mind that you have a balanced retail mix and also adhere to your retail positioning.
Every strategy or plan has its own set of merits and demerits. So choose the plan that costs you the least and is more effective as compared to others. In today’s time, omnichannel retail strategies are considered to be more effective. Apart from this, every retailer should adhere to the retail trends of his respective industry to stay ahead of the competition.
5. Emphasize short-term strategic plans
Now that the plan of retail strategies has taken shape, it’s time to subdivide this plan into shorter strategic plans. Having short-term strategic plans provides more precision towards plan execution in the shortest time frame.
Retailers make use of promotion campaigns, short-term TV commercials, pamphlets, season or festival-specific promotional advertisements, etc as part of their short-term retail strategies. All this ensures a steady incoming of revenues and also helps in building a long-term rapport with the customers.
6. Implementation of the strategies
It’s time to implement all the gray work. It’s time for the practical implementation of the planned strategies. At this step, the retailer can judge the effectiveness of his strategic decisions. The step also helps him to identify the level of increase in profits or goodwill of the retail business on strategic implementation.
But implementation of retail strategy is not a straightforward task. It faces its own set of challenges. Certain challenges are met by making a few adjustments in-house, while there are other more tasking factors in the external environment.
7. Performance analysis
Multiple retail metrics can help the retailer analyze the effectiveness of his overall retail process. These retail key performance indicators provide the direction for improvement in the planning and execution stage. The statistical analysis, as derived from the use of performance analysis tools, provides a clear picture regarding the increase in retail profit margins.
The performance analysis step involves inspection, detection, and analysis of the process. Timely inspection of the strategy at brief intervals further improves the success rate of the plan. The retailers should be vigilant and proactive in adhering to the shortcomings identified during the step of performance analysis.
To develop retail strategies, retailers need to follow the step-by-step guide, as mentioned above. Only a detailed study of the process can help the retailer plan an effective retail strategy that can guarantee the expected ROI on time. Retail planning is vital for any retailer to define his business aim and maintain his stand in the market. Apart from retail planning, the retails should also incorporate retail planning tools like retail inventory management software for the easy management of their retail business.