Retail Strategy & Marketing
1 Introduction to retail...................................................................................2
1.1 Concept of retail....................................................................................................... 3
1.2 Transaction costs Matrix...........................................................................................5
1.3 Changing function of retail.......................................................................................6
1.4 Classification Criteria............................................................................................... 7
1.5 A closer look at the strategic process.......................................................................8
1.5.1 Retail as a simple formula..................................................................................8
1.5.2 Friction Matrix.................................................................................................... 9
1.5.3 Scissors for Retail............................................................................................ 10
1.5.4 Generic growth Matrix - Ansoff Matrix..............................................................11
1.6 Retail Rollercoaster: Recent Developments & Influencing Factors.........................12
1.6.1 People:............................................................................................................. 12
1.6.2 Economy:......................................................................................................... 12
1.6.3 Technology:...................................................................................................... 12
1.6.4 Sustainability:..................................................................................................12
2 Retail models............................................................................................ 13
2.1 Function of a strategy............................................................................................ 13
2.2 Central model........................................................................................................ 13
3 Analysis - Phase 1.....................................................................................17
3.1 External Analysis – (Competitor Analysis)..............................................................17
3.1.1 Porter Matrixes................................................................................................ 18
3.1.2 No compromise gamer - Smeets......................................................................19
3.1.3 Customer relevancy model..............................................................................20
3.1.4 Store Compass.................................................................................................21
3.1.5 Performance mapping......................................................................................21
3.1.6 Net Loyalty Matrix – NPS & NLS.......................................................................22
3.2 Internal Analysis..................................................................................................... 23
3.2.1 Concept of Sales..............................................................................................23
3.2.2 Retail monitor formula.....................................................................................24
3.2.3 Retail waterfall................................................................................................. 26
3.2.4 Retail Profitability & Growth Strategies............................................................27
3.2.5 Trinity Model for profitability............................................................................27
4 Dynamic SWOT - Phase 2...........................................................................28
5 Formulate Strategy - Phase 3 – Strategic Retail Marketing policy................29
5.1 Step 1 - Market segmentation and target group....................................................30
5.1.1 Criteria for segmentation:................................................................................30
5.1.2 Segmentation strategies:.................................................................................31
5.2 Step 2 - Branding and Positioning..........................................................................32
5.2.1 What is a brand?.............................................................................................. 32
1
, 5.2.2 Functions of a brand:.......................................................................................32
5.2.3 What is positioning? (How we are positioning ourselves against competitors) 32
5.2.4 Positioning Model and gap (Sloot’s).................................................................33
5.3 Step 3 - Channel and format strategy....................................................................35
5.3.1 Channel........................................................................................................... 35
5.3.2 Format Strategy...............................................................................................40
5.4 Step 4 - Location policy.......................................................................................... 42
6 Translating analytics to tactics - Phase 4 - Tactical retail-marketing policy...43
6.1 Assortment............................................................................................................. 44
6.1.1 Classification of assortiments..........................................................................44
6.1.2 Category Management....................................................................................45
6.1.3 Category management model.........................................................................45
6.2 Price and Promotion............................................................................................... 45
6.2.1 Forms of pricing strategies..............................................................................46
6.2.2 Price elasticity.................................................................................................46
6.2.3 Prices in e-commerce.......................................................................................46
6.3 Communication...................................................................................................... 46
6.3.1 Communication methods.................................................................................46
6.4 Presentation........................................................................................................... 47
6.4.1 Store layout process........................................................................................47
6.5 Human Ressources / Personnel..............................................................................48
6.5.1 Development towards a customer-oriented organisation.................................48
6.5.2 HRM-Matrix...................................................................................................... 49
7 The future of Retail & Ai and Retail............................................................49
7.1 Timeline of AI development....................................................................................50
7.2 Levels of AI advancement......................................................................................50
7.3 Modern decision theory.......................................................................................... 51
7.4 Reinforcement learning (ML)..................................................................................51
7.5 Generative AI: early stages of a revolution............................................................52
7.5.1 Use of Diffusion Models....................................................................................52
7.5.2 Use of Large Language Models (LLM)..............................................................53
1 Introduction to retail
2
,1.1 Concept of retail
Retail marketing = Retail is all activities that companies and organization engage in
that focus on the direct delivery of goods, services, and information through all
available channels to consumers, where the goods and services are paid out of the
net income of consumer.
Albert Heijn = retail Business to Consumer B2C (Nestle is no retail as it is B2B)
Direct sales: When a manufacturer sells a product directly to customers without the
intervention of an intermediary.
Retail spending:
- Consumer services
- Goods
- Information
Different forms of retail:
Stores
Online retail
Market trade
Door-to-door sales
House parties
Vending machines
Social commerce.
Value Chain
*Retailers are at the bottom of the
business chain
Value web
3
, Overtime things started changing some manufactures started selling directly to
the end consumers. At the beginning they were doing this by wholesale dealers.
Now, consumers can even sell products to each other.
Everybody is becoming a retailer, everybody is selling
directly to end user.
The value web is a network of connections in which the
consumer has emerged as the central demand side,
situated among all kinds of providers. Rather than a single
network, there are severals that are connected.
Because of the shift in power from the producer to the
consumer, it is no longer a matter of minimising costs within the value chain from the
producer’s point of view, but of minimizing the consumer’s problems/costs in finding
or looking for a product and the transaction costs
associated with this.
T1: Search costs (finding the right product or seller).
T2: Bargaining costs (negotiating and making the
purchase).
T3: Enforcement costs (ensuring the transaction is
completed properly).
There is only one reason retail exists: it should be cheaper to sell through third party.
When you are thinking about retail this way, it is weird that retail even exist.
So, why is it possible to have retail as a third party and still reduce costs?
Distribution
There are several things that need to be considered in the transaction cost theory:
- Costs associated with buying items: searching, finding, buying, transport
- Revenues: the pleasure that of shopping and buying products or services.
The consumer will choose the supplier where the balance of costs and revenues
is most favorable. Balance so that customers costs are lowered, because they
experience/feel that we can find everything we need at one store.
However, everything is becoming digital, which means you can buy the product
anywhere. Consumers are willing to buy something online, even it is a bit more
expensive, because of the time saving factor assosiated with purchase for
customers).
Retailers should find ways to reduce transaction costs to maintain customer
appeal.
4
1 Introduction to retail...................................................................................2
1.1 Concept of retail....................................................................................................... 3
1.2 Transaction costs Matrix...........................................................................................5
1.3 Changing function of retail.......................................................................................6
1.4 Classification Criteria............................................................................................... 7
1.5 A closer look at the strategic process.......................................................................8
1.5.1 Retail as a simple formula..................................................................................8
1.5.2 Friction Matrix.................................................................................................... 9
1.5.3 Scissors for Retail............................................................................................ 10
1.5.4 Generic growth Matrix - Ansoff Matrix..............................................................11
1.6 Retail Rollercoaster: Recent Developments & Influencing Factors.........................12
1.6.1 People:............................................................................................................. 12
1.6.2 Economy:......................................................................................................... 12
1.6.3 Technology:...................................................................................................... 12
1.6.4 Sustainability:..................................................................................................12
2 Retail models............................................................................................ 13
2.1 Function of a strategy............................................................................................ 13
2.2 Central model........................................................................................................ 13
3 Analysis - Phase 1.....................................................................................17
3.1 External Analysis – (Competitor Analysis)..............................................................17
3.1.1 Porter Matrixes................................................................................................ 18
3.1.2 No compromise gamer - Smeets......................................................................19
3.1.3 Customer relevancy model..............................................................................20
3.1.4 Store Compass.................................................................................................21
3.1.5 Performance mapping......................................................................................21
3.1.6 Net Loyalty Matrix – NPS & NLS.......................................................................22
3.2 Internal Analysis..................................................................................................... 23
3.2.1 Concept of Sales..............................................................................................23
3.2.2 Retail monitor formula.....................................................................................24
3.2.3 Retail waterfall................................................................................................. 26
3.2.4 Retail Profitability & Growth Strategies............................................................27
3.2.5 Trinity Model for profitability............................................................................27
4 Dynamic SWOT - Phase 2...........................................................................28
5 Formulate Strategy - Phase 3 – Strategic Retail Marketing policy................29
5.1 Step 1 - Market segmentation and target group....................................................30
5.1.1 Criteria for segmentation:................................................................................30
5.1.2 Segmentation strategies:.................................................................................31
5.2 Step 2 - Branding and Positioning..........................................................................32
5.2.1 What is a brand?.............................................................................................. 32
1
, 5.2.2 Functions of a brand:.......................................................................................32
5.2.3 What is positioning? (How we are positioning ourselves against competitors) 32
5.2.4 Positioning Model and gap (Sloot’s).................................................................33
5.3 Step 3 - Channel and format strategy....................................................................35
5.3.1 Channel........................................................................................................... 35
5.3.2 Format Strategy...............................................................................................40
5.4 Step 4 - Location policy.......................................................................................... 42
6 Translating analytics to tactics - Phase 4 - Tactical retail-marketing policy...43
6.1 Assortment............................................................................................................. 44
6.1.1 Classification of assortiments..........................................................................44
6.1.2 Category Management....................................................................................45
6.1.3 Category management model.........................................................................45
6.2 Price and Promotion............................................................................................... 45
6.2.1 Forms of pricing strategies..............................................................................46
6.2.2 Price elasticity.................................................................................................46
6.2.3 Prices in e-commerce.......................................................................................46
6.3 Communication...................................................................................................... 46
6.3.1 Communication methods.................................................................................46
6.4 Presentation........................................................................................................... 47
6.4.1 Store layout process........................................................................................47
6.5 Human Ressources / Personnel..............................................................................48
6.5.1 Development towards a customer-oriented organisation.................................48
6.5.2 HRM-Matrix...................................................................................................... 49
7 The future of Retail & Ai and Retail............................................................49
7.1 Timeline of AI development....................................................................................50
7.2 Levels of AI advancement......................................................................................50
7.3 Modern decision theory.......................................................................................... 51
7.4 Reinforcement learning (ML)..................................................................................51
7.5 Generative AI: early stages of a revolution............................................................52
7.5.1 Use of Diffusion Models....................................................................................52
7.5.2 Use of Large Language Models (LLM)..............................................................53
1 Introduction to retail
2
,1.1 Concept of retail
Retail marketing = Retail is all activities that companies and organization engage in
that focus on the direct delivery of goods, services, and information through all
available channels to consumers, where the goods and services are paid out of the
net income of consumer.
Albert Heijn = retail Business to Consumer B2C (Nestle is no retail as it is B2B)
Direct sales: When a manufacturer sells a product directly to customers without the
intervention of an intermediary.
Retail spending:
- Consumer services
- Goods
- Information
Different forms of retail:
Stores
Online retail
Market trade
Door-to-door sales
House parties
Vending machines
Social commerce.
Value Chain
*Retailers are at the bottom of the
business chain
Value web
3
, Overtime things started changing some manufactures started selling directly to
the end consumers. At the beginning they were doing this by wholesale dealers.
Now, consumers can even sell products to each other.
Everybody is becoming a retailer, everybody is selling
directly to end user.
The value web is a network of connections in which the
consumer has emerged as the central demand side,
situated among all kinds of providers. Rather than a single
network, there are severals that are connected.
Because of the shift in power from the producer to the
consumer, it is no longer a matter of minimising costs within the value chain from the
producer’s point of view, but of minimizing the consumer’s problems/costs in finding
or looking for a product and the transaction costs
associated with this.
T1: Search costs (finding the right product or seller).
T2: Bargaining costs (negotiating and making the
purchase).
T3: Enforcement costs (ensuring the transaction is
completed properly).
There is only one reason retail exists: it should be cheaper to sell through third party.
When you are thinking about retail this way, it is weird that retail even exist.
So, why is it possible to have retail as a third party and still reduce costs?
Distribution
There are several things that need to be considered in the transaction cost theory:
- Costs associated with buying items: searching, finding, buying, transport
- Revenues: the pleasure that of shopping and buying products or services.
The consumer will choose the supplier where the balance of costs and revenues
is most favorable. Balance so that customers costs are lowered, because they
experience/feel that we can find everything we need at one store.
However, everything is becoming digital, which means you can buy the product
anywhere. Consumers are willing to buy something online, even it is a bit more
expensive, because of the time saving factor assosiated with purchase for
customers).
Retailers should find ways to reduce transaction costs to maintain customer
appeal.
4
