219 Reading: Retail Strategy
Just when we have finally mastered the marketing mix that includes the four Ps, we arrive at the retail strategy. The retail marketing strategy includes all of the elements of the traditional marketing mix:
- Retailers buy product from producers or wholesalers that will most appeal to their target market.
- Retailers set a price that delivers value for the product and the complete shopping experience.
- Retailers promote their offering, which includes the shopping experience, the products, the pricing, and broadly, the retail brand.
- Retailers create the right place, which is the point of purchase for the buyer.
In delivering the best retail experience through the right place, two additional Ps come into play: presentation and personnel.
Presentation
Think of a physical store where you enjoy shopping. What is it about the store that you like? You might like the way the store looks, feels, sounds, or smells. It might have products that draw you in and make you want to interact with them. You may just like the store because it’s familiar and convenient—you know where to find the things you need. All of these descriptions fall into two categories. They refer either to the atmosphere of the store or the layout of the store.
The atmosphere describes the feeling, tone, or mood of the store. Often, as a shopper, it is difficult to identify exactly what creates the atmosphere in a good shopping experience. (It is much easier in a bad shopping experience.) The store’s decor plays a role in the atmosphere. Are the fixtures decorative or merely functional? Is the shopper invited to linger on a couch or inviting chair, or is he encouraged to simply purchase and leave?
One important element of the atmosphere is density. How has the retailer packed elements into the space? Retailers manage the density of employees, fixtures, and merchandise. The shopping experience requires more employees if there is a high need for service or information. High-end clothing sales generally provide a higher level of service, with sales associates available to advise on fit and fashion choices and to bring the shoppers different sizes and clothing options in the dressing room. A car purchase is not one that generally involves the same type or style of service, but there is a high need for information that translates to a higher density of sales employees to explain features, financing, and availability.
The density of merchandise and fixtures also has a significant impact on the atmosphere of the store. If the shopper’s value service or the retail brand requires a high-end experience, then the retailer generally has less density of merchandise and fixtures. If the shopper most values service outputs of assortment and convenience, then the retailer will use a higher density of merchandise. For example, grocery shoppers may have different standards for the quality of fixtures they prefer relative to the price of the grocery items, but generally, they