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. Published in Marketing and Strategy Terms category by MBA Skool Team

What is Retail Strategy?

Retail strategy is a holistic marketing plan for a product or a service to reach the final
retail channel and influence the consumers. This strategy covers everything from what
retail channels a product or service will be available in to what should be the price or
sales incentive to be given and how to display the product in the shelf.

Retail strategy is developed for product to be distributed through retail outlets. When a
product is sold through a retail outlet, a number of factors affect the sale of the product.

Quick Glance:

 Factors in Retail Strategy

 Retail Strategy Example

Factors in Retail Strategy

Some of the factors as already mentioned below are:

1. Pricing/discounting of the product

2. Incentive structure followed

3. Promotions planned

4. Placing of the product

5. Display attractiveness

6. Incentive structure for the retailers

7. Overall Consumer Behavior

These are some of the major factors and is not inclusive of all. Strategizing on how to
proceed in all these friends to finally influence the consumer to buy your product is the
development of retail strategy.

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In populous cities such as Mumbai, Delhi, Tokyo, and Shanghai to

name a few, consumers face rush-hour traffic jams or jams because
of road structure. In such cases, to access a retail outlet to procure
day-to-day needs becomes very difficult. It is very important for the
consumers to have retail stores near where they stay.

Importance of Location in Retail Business

Retail store location is also an important factor for the marketing
team to consider while setting retail marketing strategy. Here are
some reasons −

 Business location is a unique factor which the competitors

cannot imitate. Hence, it can give a strong competitive
advantage.
 Selection of retail location is a long-term decision.
 It requires long-term capital investment.
 Good location is the key element for attracting customers to
the outlet.
 A well-located store makes supply and distribution easier.
 Locations can help to change customers’ buying habits.

Trade Area: Types of Business Locations

A trade area is an area where the retailer attracts customers. It is
also called catchment area. There are three basic types of trade
areas −

Solitary Sites
These are single, free standing shops/outlets, which are isolated
from other retailers. They are positioned on roads or near other
retailers or shopping centers. They are mainly used for food and
 non-food retailing, or as convenience shops. For example, kiosks,
mom-andpop stores (similar to kirana stores in India).
Advantages − Less occupancy cost, away from competition, less
operation restrictions.
Disadvantages − No pedestrian traffic, low visibility.

Unplanned Shopping Areas

These are retail locations that have evolved over time and have
multiple outlets in close proximity. They are further divided as −

 Central business districts such as traditional “downtown” areas

in cities/towns.
 Secondary business districts in larger cities and main street or
high street locations.
 Neighborhood districts.
 Locations along a street or motorway (Strip locations).

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Don’t discount cleanliness

Making sure your products look appealing is key to effective merchandising,
but how does the rest of the space look? Do customers see:

 Clean floors and aisles

 Dust-free shelves and products
 Products that are neatly stacked or hung
 A sense of organization, rather than overwhelming chaos
 Vignettes of related products set up together to suggest how they might be
used
 Enough elbow room to move about comfortably

Benefits of merchandising
Some small business owners hire professional visual merchandisers to come
in and spruce up their displays and selling floor, finding that the cost is well
 worth it. But merchandising goes beyond just moving inventory around, to
space planning and product staging. Effective merchandising yields:

 Higher sales
 Faster inventory turnover
 Buyers who spend more time in the store
 More satisfied customers
 Increased customer loyalty
Stores that present products that customers are frequently looking for in a
pleasing display, or tucked away neatly, will find those same customers
returning for more on a regular basis.

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Merchandising FAQ
What do you mean merchandising?
Merchandising is the practice of promoting a product or brand through the use
of advertising, promotions, and other marketing techniques. It is a key
component of any retail business and is used to increase sales and create
brand recognition. Merchandising includes activities such as product
placement, store displays, promotions, pricing strategies, and more.
What is merchandising in media?
Merchandising in media is the practice of creating, marketing and selling
products or services related to a particular media property or brand. This
includes producing and selling merchandise such as toys, clothing, and
collectibles based on a movie, TV show, book, or video game. It also includes
creating digital content and experiences such as virtual reality experiences
and interactive websites.
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What is Merchandise Planning?

Merchandise planning process refers to selecting, managing, and displaying
products in a manner that they bring maximum turnover on a brand name. This is
all done by meeting consumer needs and desires.

The activity seeks to meet consumer demand by making the right merchandise
available to customers at the right time, place, price and quantity.

One of the biggest expenses retailers face is buying merchandise. All the costs
of shipping, transporting, delivering, and storing add to a significant amount.
Make the wrong purchasing decision, and you may end up doubling your
merchandise purchasing costs for a month. Therefore, merchandising planning is
important to ensure that expenses do not mount up, and a retailer is able to meet
a customer’s needs the right way.

Understanding Merchandise Planning in the Retail Industry

The merchandise planning process is a critical one in the retail industry that
involves effectively managing the assortment, inventory, pricing, and allocation of
products to maximise profitability and meet customer demand. Retailers use
the retail planning process, data-driven analysis and forecasting to determine
which products to stock, how much to order, and when to offer discounts or
promotions.

An effective merchandising planning process requires collaboration between

different departments, such as merchandising, finance, and supply chain
management, to ensure that the right products are available at the right time and
in the right quantities. By optimising this process, retailers can improve sales,
reduce costs, and enhance the customer shopping experience.
q.5

What is a Merchandising Manager?

A Merchandising Manager is responsible for making decisions related to stocking,

pricing and presenting goods in retail stores. They also analyze sales and inventory
data to determine consumer preferences that help them decide which items to put on
sale or how much of a particular product they should purchase for stocking
purposes.

Merchandising Managers have a certain amount of creative freedom, as they often

plan product displays that will attract the attention of the customers and entice them
to buy products. According to the Bureau of Labor Statistics, demand for
Merchandising Managers, which are categorized as Purchasing Managers, is
expected to show 2 percent growth through 2024, amounting to around 700 annual
openings. This slowed growth is due to many organizations contracting with third
parties to complete tasks typically designated for Merchandising Managers to
decrease costs.

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 Merchandising Manager Duties and
Responsibilities

When striving to accomplish their goals of stocking, displaying and monitoring

different products, Merchandising Managers perform various tasks, which often
depend on the size and location of the store or stores they oversee. We examined
several job listings to identify these core Merchandising Manager duties and
responsibilities.

Conducting Demographic Research

Merchandising managers have to gather demographic data from vendors that is

based on the income, average age and sell-through data relevant to the customer
base in their store’s area. Merchandising managers analyze this data and use it to
assist marketing personnel in purchasing and presenting items that are likely to
sell well in stores.
Identifying Optimal Vendors and Making Wise Purchasing Decisions

Merchandising Managers are often responsible for identifying and working with
reliable vendors who can most successfully fulfill product needs at the best price.
Once the vendors are identified, purchases need to be made at the right time and
in the correct amounts to best fit the store’s needs.

Forecasting and Negotiating

One of the roles of a Merchandising Manager is to collaborate with the finance

department to forecast or determine whether the costs of raw materials will
increase or decrease. Once these forecasts are made, decisions can be made as to
whether to try to negotiate with vendors to lock in a price on products that may
experience a rise in production cost and potentially cost the store more to stock.