Question

Performance measures are important for the success of every retail business. Using merchandising philosophy as the benchmark:
a) Recommend to a retail business of your choice what they should consider in developing their merchandise philosophy and why?
b) Depict your selected retailer on a positioning map against two competitors based on guidelines for merchandising decisions.

The Management of a retail organization has just appointed you as a Store Manager of one of their new outlets and you have been given a multiple task.
a) How will you encourage customers to spend more time shopping?
b) What will be your recommendation on the impact of community relations on
the retail organization’s image?

Retail strategy

Answer 1

Answer a:

Retail businesses are the businesses that sell consumer goods or services to customers through multiple channels of distribution so as to earn the profit. A retailer’s merchandising philosophy is the scheme it uses to attract consumers to buying its product or products.

Let us take into consideration the retail business of Reliance digital which sells electronic goods to the customers in Indian market. Reliance digital are the retail stores specifically owned by Reliance Industries Ltd and are focused on selling the range of all types of electronic household items to the end customers.

The merchandising philosophy that Reliance digital should use is that they should focus on the cost of the items that they sell to the end customers. Reliance digital stores are located in large malls and shopping complexes where there are lot competitors who sell similar kind of products of the similar or same brands. There is a competition between these retailers on the basis of price. If the customer finds that the competitor of Reliance digital is selling the same product of the same brand at slightly lower price, then customer will move to that competitor for making the purchase. Thus cost leadership is very important for attracting the customer.

Reliance digital should also use several other techniques of merchandising philosophy to attract the customers such as bundling the main product with small attractive surprises for the customers like providing a free small discount coupon his next purchase from the store so that customer will purchase the item in anticipation of future benefits.

Reliance digital should also focus on customer relationship management so as to make the customer loyal for the business.

Answer b:

Positioning provide a competitive advantage to the retailer by differentiating itself from the rest of its competitors. For this reason, it should guide the rest of decisions about how the retailer satisfies its target consumers as compared to its competitors in terms of, price, place, product and promotion.

Reliance digital holds a strong positioning as a retailer of various brands of electronic goods in the market and gives a strong competition to Big Bazar of Future group and Lotus electronics.

Reliance digital charges a competitive prices for the items it sells to the customers which proves to be its most strong merchandising philosophy among its competitors. Moreover, the stores of reliance trends are located in almost all the big and small malls and supermarkets in every small and large city of the country. Reliance digital has several stores in the rural part of the country as well so as to focus on the rural marketing and attracting more customers as around 70% of the Indian population is located in the rural areas. Its major competitors do not have any of the stores in the rural markets.

Reliance digital supply almost all kinds and brands of electronic items to the customers so that they are not required to visit any other store for any kind of electronics item. Reliance trends use several promotion techniques to attract the customers. It advertises on the television and newspapers about the latest offers on variety of products to attract customers.

a) To encourage customers to spend more time shopping, the retail stores and outlets need to come up with a memorable shopping experience for them. This experience can be defined by the ambience and layout of the store, the way the staff greet and help the customers as well as how the retail store make shopping interesting by offering discounts and offers. Some of the ways in which the customers can be attracted to the retail store are as follows;

· Conduct a survey to identify the specific needs of the customers

· Come up with offers and benefits aligned with the customer needs

· Plan the layout of the retail outlet in a way that customer will have easy accessibility

· The staff of the outlet must be trained in communication as well as customer handling skills

· Come up with loyalty points for regular customers

· Offer facilities like same day delivery as well as home delivery

b) Community relations play a critical role in defining the way the retail organization’s image is defined. It helps in developing a trust and cordial relationship of the organization with the residents of the region. If the customers trust the company and can relate to it, then only they will try to associate with the company’s offerings. Hence community relations is an important aspect for retail organizations and they must come up with interesting interventions to facilitate the same.