Emerging Trends in Retail Marketing strategy
The essence of retail marketing is developing merchandise and services that satisfy specific needs of customers, and supplying them at prices that will yield profits. Thereby the concept is a philosophy, not a system of retailing or retail structure. In today’s CRM landscape the old analogy comparing the rifle and shotgun approaches to message and / or offer delivery is perhaps more appropriate than ever, as more retail organizations struggle to achieve one-to-one marketing-communications with customers and prospects.
Targeting allows a retail enterprise to channel its marketing budget4ere there is the greatest (and fastest) possibility of Return On Investment (ROI)
Retail Marketing mix
Retail Marketing mix is the term used to describe the various elements and methods required to formulate and execute retail marketing strategy.
The mix may vary greatly according to the type of market the retailer is in, and the type of products / services.
A marketing strategy is a process that can allow an organization to concentrate its
limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage’. A marketing strategy should be centred around the key concept
/ that customer satisfaction is the main goal.
A strategy consists of a well thought out series of tactics to make a marketing plan more effective. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing. Plans and objectives are generally tested for measurable results.
Today’s retail Marketing Managers Must :
Understand the connections between the lifestyle and expenditure characteristics of customers, their propensity to purchase one product or brand over another, and leverage this understanding for competitive advantage.
Improve direct marketing response by ensuring they are targeting the right households at the right time, using the right media with the right message.
Leverage current consumer data to make better strategic decisions about products, marketing and locations.
Increase customer loyalty and retention with a scientific, data driven approach to analytical CRM.
Retail marketing managers can implement the following projects to understand their customer, market and store locations better; achieving a very strong ROI for their retail marketing efforts in the process.
Customer and Market Potential Estimates:
Estimate the revenue potential of your customers to determine their current, potential and life-time value
• Estimate your market potential for more effective acquisition initiatives
• Quantity and qualify your market opportunities.
Customer and Market Profiles:
• Develop more effective communication strategies through a better understanding
of who your customers are
• Identify your market potential through a better understanding of your targets.
Customer and Market Segmentation:
• Develop more effective communication strategies through a better understanding
of different customer groups and your market segments
• Customize your product offers by different customer and market segments.
The nature of retail Marketing:
- The key aspects of retail marketing is an attitude of mind.
- In making retail marketing decisions, retailers must consider the needs of the customers.
- Retail marketing decisions are driven by what the shoppers need and want.
- Retail marketing is therefore a philosophy and is all about satisfying the customers
- What the customers regard as value and what they buy is decisive.
- What the customers buy determines the nature of the retailer’s business.
- The essence of retail marketing is developing merchandise and services that satisfy
specific needs of customers, and supplying them at prices that will yield profits.
- Retailers must take the customers’ needs into consideration in retail operation.
- Retail marketing is stimulating, quick-paced, and influential.
- The retail marketing concept is the acceptance by the retailer that it is the “customer”
and not “demand” that lie at the core of the retail organization.
The Emerging Sectors:
Retailing, one of the largest sectors in the world economy, is going through a transition phase. For the long time, the corner general store was the only choice available to the customer, especially in the urban areas. This is slowly giving way to global format of retailing.
The emergence of new retail sector have accomplished by changes in existing formats as well as the beginning of new formats.
The changing Retail Environment:
Profound changes are taking place, and will continue to occur, in the retail industry. In terms of sales, the retail landscape is moving away from specialty stores and department stores toward discount retailing.
Although the future is difficult to predict, forthcoming trends in retailing will focus on demographics, geographic convenience, time convenience increased food expenditure away from home and rapid changes in information technology. In addition, retailers will find a convergence of electronic methods and traditional methods of Retailing.
Five pillars of Retailing:
Heoxard Berry describes five important actions for Retailers. These actions, demand pillars, sound simple but are often difficult to implement.
- Solve customer’s problems.
- Treat customers with respect.
- Connect with customer emotions.
- Set the fairest (not the lowest) price.
- Save customer’s time.
Retailers should always keep these pillars in mind when conducting business. As the work force becomes more diverse and the retail environment continues to changes, consumer’s needs are rapidly changing.
Retailer’s Responses To the changing customer:
Retailers will need to alter their way of thinking to adjust to the changing customer.
- Retailers that convey the appropriate level of respect will experience an increase in customer loyalty and sales.
- Retailers must dig deep to learn who their customers are, so they can develop viable customer segments.
- The old marketing concept will need to be modified from “satisfying” customers to “wowing” customers.
The world has entered the digital information age. Retailers in a variety of industries are now using advanced computer systems to enhance their ability to understand, communicate with and evaluate their market place and to anticipate and respond to their customer’s needs, Retail shops are using bar code scanners at their check out point to gauge the types of product their customers are buying.
Retailing on the net is known as E- tailing. Internet has changed the way we do shopping. It has brought the commerce will play a crucial role in shaping the future of retailing. The real challenge for retailing would be launching and managing a highly innovative click business that works along with a more stable bricks business. For shoppers and retainers it is increasingly a hybrid world.
Merchants that reach consumers through different sales channels, stores, websites catalogues, find that they enjoy key advantages over competitors that operate in just one world. E-tailing is still a nascent business model all over the world and it is to be seen how it emerges in the future. E-tailing will also work best as an adjunct and supplement to brick and mortar set up.
On the flip side, retail stores can make consumers more comfortable with internet shopping since most traditional merchants allows customers to return on-line purchase to their offline stores.
E-commerce in Retail marketing:
“With Electronic – commerce, we have reached the flash point” – says Ferguson. The internet throws many exiting trends under an are light and accelerates the transformation to web years. There is an occupational hazard in the world of electronic commerce. There is an existing and confusing time. In some ways electronic commerce has already had profound impact – just the Wall Street brokers who have been watching their private clients flock to online discount brokers.
The single most important evolution that took place along with the Retailing evolution was the rise and fall of the dotcom companies, more importantly, the very nature of the customer segment being addressed was almost the same. The computer-savvy individual was also a scale- sector of the store.
Internationally, the concept of net shopping is yet to be proven. Now ever, the size of the direct market industry is too limited to deter the Retailers, for all convenience that it offers, electronic retailing does not suit products where “look” and “see” attributes are of importance.
According to the wheel of retailing theory, retail innovators often appear as low – price operators with a low-most structure and low-profit margin requirements. Over time, these innovators upgrade the products and become high price orators. This meant enlarging the sales force, improving locations, upgrading fixtures, carrying lower thrower merchandise and granting credit etc… These improvements lead to higher cost which tern lead to higher prices.
Image refers to how a retailer is perceived by customers and others succeed, a firm must communicate a distinctive, clear and consistent image. Once its image is established in consumer mind, a retailer is placed in a riche relative to competitors.
Retailing is a technology – intensive industry successful retailers today work closely with their renders to predict consumer demand, shorter lead times, reduce inventory holding and thereby save cost.
Wal-Mart pioneered the concept of building a competitive advantage through distribution and information systems in the Retailing industry.
The traditional Retailers will always continue to exit but organized retailers are working towards revamping their business to obtain strategic advantages at various levels – market, cost, knowledge and customer.