Coping with Retail Giants

Gaining an Edge Over Discounters

A. Coskun Samli

• Publisher: Palgrave Macmillan
• Year: 2015
• ISBN:
  9781137476340
• Topic: Business
• Subtopic: Management
• Index: Business

Coping with Retail Giants critically analyzes the modern retail market and identifies how businesses gain the competitive edge over the major retailers that currently control the market. Dr. Samli argues that as society advances economically, consumers will seek better values generated by the retailing sector.

1

Preopening Preparations

Consider the two following stores. Store one looked for a low-rent place and went to an area which is off the beaten path; the store did not have a nice appearance; the owner manager assumed that customers would come to the store regardless; this did not happen and the store went bankrupt.

Store two looked at a number of location possibilities and finally located at a very active side of a mall. The owner manager planned the stores appearance, made many preopening announcements, and did not mind paying very high rent for a location that created heavy traffic. It became very successful.

This is rather an uncultivated area in retailing, planning and implementing preopening. But in this day of significant retail competition which is discussed in many sections of this book, having a plan of action before the retail establishment is opened can be rather important.

Whether it is an addition to a chain or an independent store, two broad areas needed to be considered: first what kind of information is needed to be communicated, and second how should it be communicated, that is the preopening promotional activity.

Exhibit 1.1 presents a basic list for general preopening promotional activity that must be considered. As it is reiterated throughout this book, the worse thing in a market system is being a well-kept secret. Without prepromotion the retailer becomes a well-kept secret. This certainly is a major consideration for a new retail establishment.

What Are Our Strengths?

Even though not confirmed or accepted by its customers, the prospective retail establishment must have certain features or certain functions in mind as its strengths. For an existing chain, there always is an image. The question is do we want the continuation of that particular image or do we want to modify it for local conditions is the issue. On the other hand, if we are dealing with a new independent retailer we must realize that whatever we promise at that stage is likely to become what is going to be expected from us. That expectation is the beginning of the emergence of a prospective image. That image is the evidence of differential congruence.

Exhibit 1.1   A Preliminary Checklist for Promotion

What Do We Promise to Accomplish

Although every retail entity has certain strengths, the location and the immediate community which may be called the primary market may have needs other than the strengths of the incoming retail establishment. If the local needs and strengths of the incoming retail establishment are completely different, for instance say the new retail establishment is a specialist on health foods but, the community really needs low-price foods, this becomes a total mismatch and it should not materialize.

Do We Have an Image to Project?

If we are starting a new retail establishment, we have to develop an image that will differentiate that retail establishment from others. Here the image and perhaps a slogan must reflect that retail establishment and its own perceived vision by the market. “Just do it” or “save money live better” are well-known slogans supporting a proposed image.

But if we are dealing with a new addition to Nordstrom, which is a major upper-middle-class chain, it will be totally wrong to go against the Nordstrom image. It is necessary to implement the same image all Nordstrom units project.

Do We Have a Proper Preopening Checklist?

If a retail establishment is in the process of being opened, the preopening promotion is so critical that we must have a complete checklist of whom and what is to be communicated.

Let us assume for instance that we are considering opening a gym in a small community of Maine. Before we prepare a checklist we must explore, for instance, was there a gym that discontinued its functions in the region? If there was one, is there a possibility to get their membership list similarly, are there a number of organizations with many workers, and are they interested if these workers exercised? Additionally, what are the local most effective mass media? Are there possibilities of local Chamber of Commerce or local administration that may sponsor us? Certainly depending upon the community and type of business, it is possible to have many other alternatives. After many alternatives having been considered, it becomes possible to construct a preopening activity checklist. Most of the items that should be considered are discussed below.

Who Do We Communicate With?

In all of the preopening considerations, it is necessary to consider the target market the proposed retail establishment is considering. Unless it is a giant discount store, a small independent retailer needs to be able to communicate with its target market. It is critical that the preopening activities are not wasted by communicating with everyone in the assumed trading area.

How Do We Communicate?

This question needs to be answered by following the checklist mentioned above. That checklist provides the basics of preopening communications. Effort must be made to reach out to the prospective market.

How Much Are We Likely to Spend?

As discussed in different sections of this book, perhaps the most important consideration is not to have a specific budget at the beginning preopening communications activity. It is necessary to determine just what is going to be done and then how much all this will cost. Establishing a budget figure before all of the preopening activities are considered could be very limiting and quite inadequate.

Physical Preparation

In the final analysis, it is the physical facility that is going to make the total impact. It is, therefore, critical to plan the store in terms of what appeal it may project and if it can carry out the projected image. Whether or not the retail establishment fits into the other retail institutions surrounding in terms of appearance or must have much different appearance to attract attention needs to be decided at this point.

Exhibit 1.2   Preopening Consideration of the Physical Facility

Exhibit 1.2 presents six very general areas that need to be considered before the retail establishment is opened for business.

The Outside Appearance

This is the first and probably the most important consideration. The store’s physical appearance must be attractive to encourage consumers to explore. Being attractive also means ability to communicate with the prospective customers. Here, what the appearance physically conveys as a message and what additional physical messages must be added are very important questions and must be considered very carefully. Additionally, the store, although it may make a statement by its appearance, must also be somewhat consistent with other stores in the total shopping complex. If, for instance, the shopping complex is projecting a dynamic and youthful picture, the new proposed retail establishment should not project a somewhat static and, say, very conservative image.

Temporary Signs

Any starting retail establishment may have some signs such as “soon XYZ is coming here,” or, “XYZ will be open for business at certain date,” or some variation of such signs. Not only should they be attractive and readable, but also they must be very factual. If the proposed store did not open at the time the sign announced, it will create a major disbelief to anything the store will claim later.

Consistency with Other Retailers

As discussed in chapter 3 as a group, the retail stores project a synergistic image. In order to be a part of that synergistic power, the proposed retail store needs to be consistent not only with appearance, but also in terms of its offering. Again, if the total retailing complex addresses dynamic and youthful groups of consumers, the proposed new store needs to be at the same wavelength or needs to look at another location which may be more suitable for what it projects and what it promised to achieve.

Internal Layout

This is a critical preopening expenditure item. The proposed retail establishment must have an internal plan indicating how the merchandise is likely to be displayed and what type of customer traffic is likely to be expected. Again, based on the total image the store is expected to project, the internal décor must be consistent. The first expression and expected image of the internal appearance and convenience for customer shopping is likely to have a rather long-lasting positive or negative impact.

Convenience versus Attractiveness

For a shopper, convenience versus the attractiveness of the store’s layout can be puzzling. Is there any way that these two extremely important concepts can be consistent with each other? In fact, they were consistent, meaning that the store layout is arranged in such a way that it is more convenient for customers to shop, but is also an attractive layout of the store’s interior. This certainly could create a synergistic impact for the store and could make the shopping experience very attractive.

How Much Are We Likely to Spend

The answer is necessary as mentioned earlier. Establishing a budget figure in advance is not appropriate. It is extremely important that the proposed retail establishment be able to accomplish what it was set out to do.

Utilization of Social Media

Different types of social media are in the process of emerging. Some of these can be used for preopening information dissemination. Similarly, the proposed new retail establishment must have online offerings with pictures and attractive prices. But, particularly bringing the prospective customers to the physical facility and connecting with them individually are extremely important activities. Here, the new retail establishment may consider developing some entertainment and special prices.

The Psyche of the Entrepreneur

The owner/manager of the proposed retail store must believe in what is being offered to the market. The entrepreneur, above all else, may ask what the proposed store’s primary emotional space is. In other words, to what extent this store will become a well-liked place to be shopped in. Then, the mental question may be raised as to how unique the place is. Is it the first in the market or is it similar to others? The owner/manager may further ask “am I offering performance benefits?” This may be followed with a question, “just who are my core customers?” Finally, two mental questions may be raised: first, am I offering a technically strong and emotionally engaging place and second, do I have certain plans for major future advancements?

Summary

This brief chapter deals with a very important, but not carefully cultivated issue of preopening. It is extremely important that a proposed, new retail establishment must be properly promoted. That promotional effort must be supported by the physical entity. If there are not enough financial facilities, it should not be opened.

But, above everything else, the entrepreneur must have the proper attitude and psychological makeup so that what is being done here is the right thing.

2

Retail Marketing Strategy Development

A retail establishment must have certain features that distinguish it from others. Those features will enable consumers to identify...

Table of contents

• Cover
• Title
• Introduction
• 1   Preopening Preparations
• 2   Retail Marketing Strategy Development
• 3   Fitting into Multilayered Retail Competition
• 4   Major Trends in the Retailing Sector Which Independents Must Know
• 5   The Retail Evolution
• 6   Capitalizing on Market Potentials
• 7   Consumer Behavior and Retail Strategy
• 8   Strategy Alternatives
• 9   Developing, Measuring, and Managing Store Image
• 10   People Are Our Strength
• 11   We Must Communicate with Our Market
• 12   Developing a Merchandise Mix
• 13   Pricing Strategies
• 14   Being Connected to a Supply Chain
• 15   Store Performance Evaluation
• Postscript
• References
• About the Author
• Index