VentureBeat via Midjourney
As the retail industry gears up for the big NRF 2024 conference that gets started on Jan. 13, it is clear that generative AI will be top of mind for many and Google is aiming to be a key part of the action.
Today Google Cloud announced a series of AI technologies and services designed to help retailers deliver more personalized and efficient shopping experiences to their customers. The new services extend Google’s existing generative AI technologies….Story continues.…
Source: Will retailers look up to the cloud for gen AI? Google Cloud hopes so | VentureBeat
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The distinction between “strategic” and “managerial” decision-making is commonly used to distinguish “two phases having different goals and based on different conceptual tools. Strategic planning concerns the choice of policies aiming at improving the competitive position of the firm, taking account of challenges and opportunities proposed by the competitive environment.
On the other hand, managerial decision-making is focused on the implementation of specific targets.” In retailing, the strategic plan is designed to set out the vision and provide guidance for retail decision-makers and provide an outline of how the product and service mix will optimize customer satisfaction.
As part of the strategic planning process, it is customary for strategic planners to carry out a detailed environmental scan which seeks to identify trends and opportunities in the competitive environment, market environment, economic environment and statutory-political environment. The retail strategy is normally devised or reviewed every three to five years by the chief executive officer.
The profit margins of retailers depend largely on their ability to achieve market competitive transaction costs. The strategic retail analysis typically includes following elements:
- Market analysis – Market size, stage of market, market competitiveness, market attractiveness, market trends
- Customer analysis – Market segmentation, demographic, geographic, and psychographic profile, values and attitudes, shopping habits, brand preferences, analysis of needs and wants, and media habits
- Internal analysis – Other capacities including human resource capability, technological capability, financial capability, ability to generate scale economies or economies of scope, trade relations, reputation, positioning, and past performance
- Competition analysis – Availability of substitutes, competitor’s strengths and weaknesses, perceptual mapping, competitive trends
- Review of product mix – :: Sales per square foot, stock-turnover rates, profitability per product line
- Review of distribution channels – Lead-times between placing order and delivery, cost of distribution, cost efficiency of intermediaries
- Evaluation of the economics of the strategy – Cost-benefit analysis of planned activities
At the conclusion of the retail analysis, retail marketers should have a clear idea of which groups of customers are to be the target of marketing activities. Not all elements are, however, equal, often with demographics, shopping motivations, and spending directing consumer activities. Retail research studies suggest that there is a strong relationship between a store’s positioning and the socio-economic status of customers.
In addition, the retail strategy, including service quality, has a significant and positive association with customer loyalty. A marketing strategy effectively outlines all key aspects of firms’ targeted audience, demographics, preferences. In a highly competitive market, the retail strategy sets up long-term sustainability.
It focuses on customer relationships, stressing the importance of added value, customer satisfaction and highlights how the store’s market positioning appeals to targeted groups of customers. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation (also known as physical evidence).
The retail mix is loosely based on the marketing mix, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, Personnel and Presentation since these contribute to the customer’s unique retail experience and are the principal basis for retail differentiation.
Yet other scholars argue that the Retail Format (i.e. retail formula) should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing (see diagram at right). The primary product-related decisions facing the retailer are the product assortment (what product lines, how many lines and which brands to carry); the type of customer service (high contact through to self-service) and the availability of support services (e.g. credit terms, delivery services, after sales care).
These decisions depend on careful analysis of the market, demand, competition as well as the retailer’s skills and expertise. Customer service is the “sum of acts and elements that allow consumers to receive what they need or desire from [the] retail establishment.” Retailers must decide whether to provide a full service outlet or minimal service outlet, such as no-service in the case of vending machines; self-service with only basic sales assistance or a full service operation as in many boutiques and speciality stores.
In addition, the retailer needs to make decisions about sales support such as customer delivery and after sales customer care. Place decisions are primarily concerned with consumer access and may involve location, space utilisation and operating hours. Retailers may consider a range of both qualitative and quantitative factors to evaluate to potential sites under consideration.
Macro factors include market characteristics (demographic, economic and socio-cultural), demand, competition and infrastructure (e.g. the availability of power, roads, public transport systems). Micro factors include the size of the site (e.g. availability of parking), access for delivery vehicles. A major retail trend has been the shift to multi-channel retailing.
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