Get ready to chart a new course in the retail industry! The waters are rough, with economic uncertainty, consumer expectations shifting, and game-changing megatrends like e-commerce, sustainability, and digitalization shaking up established business models.
The traditional approach to strategic planning is no longer enough to steer you to success. But don’t get discouraged just yet!
In this article, we'll explore why the usual approach is falling short and reveal a proven, highly effective 6-step retail strategic planning process. We’ll show you a real-world example of a strategic plan from one of the largest global retailers.
We'll also arm you with a comprehensive retail strategic plan template to help you create and execute a winning strategy that will gain your organization a competitive advantage and unlock growth potential.
Here’s what we’re going to cover:
- Why the Traditional Approach to Strategic Planning in Retail Falls Short
- 6 Steps of Highly Effective Strategic Retail Planning
- Retail Strategic Plan Example + Template
- The Key to Retail Success in 2023: An Execution-Ready Strategic Plan
Why the Traditional Approach to Strategic Planning in Retail Falls Short
Today's retail market demands a different approach to strategic planning, as long-term planning cycles and spreadsheets are no longer effective. This traditional approach is disconnected from day-to-day operations and business leaders focus too much on planning and perfecting their strategies instead of executing them. As a result, their strategies are bound to fail before they even hit the ground.
Here’s why:
- Dynamic market conditions and global supply chain disruptions: The retail industry is constantly changing, making it hard to stick to a long-term plan.
- Digitalization and technology disruptions: Digital transformation requires quick action and rapid adaptation across all levels of the organization, but the traditional approach can’t break through organizational siloes and keep up with the pace of change.
- Increased consumer expectations: With customers' expectations constantly shifting, relying on the slow and rigid approach to strategic planning can result in a market share loss.
These factors highlight the need for a more flexible, adaptable approach to the strategic retail planning process and retail operating model. By adopting an execution-first mindset, data-driven, and flexible approach to retail strategy, retailers can accelerate their digital transformation, stay ahead of the competition and deliver profitable growth.
📚Recommended read: Strategy study: How Costco's Unique Business Model Resulted In Global Success
6 Steps of Highly Effective Strategic Retail Planning
In the steps below, you’ll discover how to develop a retail strategy on a corporate level, connect the dots between strategy and day-to-day execution, and integrate fast adaptability into your retail operations.
Let's unpack how you can get it right:
1. Start with a situational analysis
The first step of effective strategic retail planning is conducting a thorough situational analysis. This strategic analysis involves evaluating both internal and external factors that may impact your retail business.
One useful tool in this process is a SWOT analysis, which evaluates the strengths, weaknesses, opportunities, and threats of your retail business.
The internal analysis should look closely at your company's strengths and weaknesses, while the external analysis should examine the opportunities and threats in the competitive landscape, economic conditions, industry trends, and broader market forces.
You can also take advantage of other analysis tools for a more in-depth analysis of the external environment, such as PESTLE analysis or Porter’s 5 Forces.
💡Here's a pro tip: Even if you’re planning at a corporate level, you shouldn’t neglect your key stakeholders in this step. These people will be responsible for bringing your retail business strategy to life, so it's important to get their input. Here are some examples:
- Your retail marketing team will tell you more about your competitors, market segmentation, and target market demographics. Plus, they should give you insight into which growth and marketing strategies are best for different target markets.
- Your merchandise management team can give you insights into merchandise planning and pricing strategies that work best to maximize turnovers.
On top of that, when they're a part of the process, they'll feel more invested in making your strategy a success.
📚Recommended read: How To Effectively Co-create Strategy At Your Organization (Recap of the workshop led by Ilana Rosen, Director of Strategy at Old Navy)
2. Get insights from your consumers
Consumer-centric strategies are one of the key factors in securing a successful retail business. Did you know that companies can reduce operational costs by 10 to 25 percent as a result of improved customer experience and digital transformation? That's why it's important to get insights from your consumers.
Your goal needs to be to have a complete, 360 view of your consumer. You can start by looking at demographics. What’s your target audience? What are their backgrounds, habits, and motivations? What does their typical customer journey look like?
By informing your retail strategy with consumer insights, you’ll be able to ground your strategy in data and set your business up for success. Let’s look at Nike, for example. They realized that a large portion of their customers were young athletes who wanted more from their gear to enhance their performance. This insight led to the creation of Nike's innovative "Dri-Fit" line, which has become a staple for athletes around the world.
By conducting a comprehensive consumer behavior analysis, you will gain a better understanding of consumer behavior and their needs. With these insights, you can then identify areas for improvement, innovation, and strategic opportunities for growth.
📚Recommended read: How Nike Runs The Sportswear Game
3. Develop an overarching retail strategy, set objectives, and build a roadmap
In the second step of effective strategic retail planning, you'll want to outline general business intent, formulate your overarching retail strategy and build a strategic roadmap. This includes defining your strategic priorities and key retail objectives, and determining the measures of success.
To help you with this process, you may find it helpful to use a strategic plan template, such as this one → Retail Strategy Template by Cascade.
To create a robust strategy and roadmap, there are several key elements that you should include:
🔎Focus areas: Outline the specific areas of the business that your strategy will focus on. For example, a focus area for a retail business might be boosting digital growth, improving customer experience in-store, expanding into new markets, elevating customer omnichannel experience, or enhancing inventory management.
📌Key Retail Objectives: Define specific, measurable, time-bound, and achievable objectives for each strategic focus area. For example, increasing customer satisfaction by 10% in the next 12 months, or launching a new e-commerce platform within the next six months.
📈Measures of Success: This defines how the success of your strategies will be evaluated. For example, a KPI (Key Performance Indicator) for a retail business might be customer satisfaction scores, the number of active loyalty customers, market share, or online sales growth.
📤Action Plan: Break the overall strategic plan down into smaller, short-term, and specific actions or projects you need to take to achieve your long-term objectives and prioritize the most critical initiatives. This might include launching a new mobile app, investing in a new CRM system, hiring additional staff, improving on-shelf availability, or training employees on customer service.
📅Timelines: Establish deadlines for key milestones and deliverables to ensure you stay on track and meet your objectives.
😎Owners: Identify who will be responsible for executing each aspect of the strategy. This could include anyone from your senior management or division managers.
💰Budget: Allocate financial resources that will be required to implement strategies and keep track of the budget spent.
By including these key elements in your retail planning strategy and roadmap, you'll have a clear understanding of where you want to take your business and how you'll get there. The roadmap will serve as a guiding principle as you move forward with the rest of your strategic planning process and strategy execution.
👉 Here’s how Cascade can help you in this step:
With Cascade’s strategic planning feature, you'll have a clear, visual representation of your strategic plan and roadmap, making it easy to see how each aspect of your strategy fits together and how you're progressing toward your goals.
Say goodbye to confusing and complex spreadsheets - with Cascade, you'll have all the information you need in one place. And, the best part? It's not just a pretty picture - Cascade helps you track progress and measure success, ensuring that you're always on the right track to achieving your retail objectives.
4. Align retail operations with the overarching business strategy
Step three is all about getting your people on board! Sharing the company strategy with your teams is crucial. Not only does it give them a clear understanding of what the big picture looks like, but it also helps ensure their daily efforts are connected to corporate goals.
However, one of the key problems in the goal-setting process, especially in larger, complex, and multinational organizations, is that it can become "opaque — with clarity diminishing" as goals are passed down through the hierarchy, according to the report Reimagining Performance Management from AICPA & CIMA and the World Business Council for Sustainable Development.
With Cascade, it's easy to cascade corporate goals and make sure everyone's focused on the right strategic initiatives to keep the business moving forward and delivering on the corporate strategy.
👉 Here’s how Cascade can help you:
With Cascade, you can easily link strategic objectives to individual business unit plans or departmental plans, so you and your teams can see the direct connection between their initiatives and their impact on corporate goals.
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Plus, it makes communication and cross-collaboration between teams a breeze, so everyone is always in sync. Say goodbye to misaligned efforts and hello to a seamless, aligned strategy execution with Cascade.
5. Time to execute your retail strategic plan!
The fifth step is all about putting your plan into action! It's time to stop just talking the talk, and start walking the walk. You've developed a fantastic retail strategy, now it's time to share it with the world (or at least, your organization). Make sure everyone understands your overarching retail business strategy and how it fits into the bigger picture. Here are some tips to help you communicate it effectively:
- Make it accessible: Don't hide your strategy in a dusty PowerPoint presentation; make sure it's available in one easily accessible place for everyone in the organization. This will help you to keep strategy relevant and alive throughout the execution phase.
- Lead by example: As a leader, you should set the tone and lead by example. Encourage everyone to take ownership of the strategy and be proactive in its execution.
- Use different communication channels: Different people prefer different communication styles, so make sure to use a variety of channels. Ankur Gupta, Principal of the Strategic Planning Office at FedEx, suggests regular town halls and announcements from the senior leadership. Try intranet sites, regular meetings, and daily standups. Or personally visit the company’s retail stores. This will help you to build trust with store managers and frontline workers and get buy-in into what needs to be done to successfully execute your strategy.
By following these tips, you'll be well on your way to executing your retail strategy and achieving your goals!
👉Here’s how Cascade can help you:
Cascade creates a centralized place for your strategy and is easily accessible to everyone who needs to be involved in strategy execution. Plus, you can manage your organization's strategy in a secure hub, allowing only those with permission to access sensitive information.
6. Monitor and adapt as you go
In this final step of the strategic retail planning process, it's crucial to have an effective performance management system in place to monitor progress, analyze performance, and make data-driven decisions. The goal is to make sure the retail business stays on track to achieve its objectives and to make quick adjustments along the way.
Here’s what you should do in this step to ensure successful strategy execution:
- Move beyond manual reporting: Many retailers rely on manual methods of compiling reports, which can be time-consuming and result in missed opportunities. To access sales performance, cost, and profitability information in real-time, it's essential to embrace automation and end-to-end visibility in the strategic retail planning process and its execution.
- Establish an effective performance management system: Regular quarterly reviews, scheduled progress reports, a rewarding system, and one-on-one syncs with key team leaders can help ensure the retail business stays on track to achieve its objectives. Cascade provides a single source of truth that reveals in real-time if goals have drifted, making it easier to make any necessary adjustments.
👉 Here’s how Cascade can help you:
- Connected data sources: Connect multiple disconnected business tools in one place with Cascade’s integrations, reducing context switching and maximizing efficiency.
- Live dashboards: Get real-time visibility into your business's performance with Cascade's live dashboards. Stay ahead of the game by monitoring critical metrics regularly and making data-driven decisions with ease.
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- Progress reports: Get regular updates on how your retail strategy is performing with Cascade's progress reports. Track progress, identify areas for improvement, and stay on track to achieve your objectives.
Tired of spending hours and hours putting together reports for the management board? Tedious! Let's face it, manual reporting can be a real drag.
But with Cascade, you can focus on what really matters - analyzing business performance and making data-driven decisions. So, you can impress the management board with spot-on, accurate strategy reports that show how their business is doing.
Retail Strategic Plan Example + Template
Ready to start crafting your own execution-ready plan? To make your strategic planning process easier, we’ve created a real-world inspired strategic plan based on Costco’s, the world’s third-largest retailer, annual report.
Here’s what Costco’s strategic plan would look like following the strategic planning model we outlined in step 2 above:
Focus area: Efficiency
Objective: Reduce our costs without sacrificing quality
Actions: Expanding the in-country sourcing options / Acquire and develop cloud-based software to manage logistics of big and bulky items / Decrease the Cost Of Goods Sold (COGS) by 18%
Measures: Net sales, COGS, delivery time
Here’s a preview of Costco’s strategic plan template:
When you sign up, you'll get instant access to a template pre-filled with Costco's examples. Now, keep in mind that this template is meant to be an inspiration. We encourage you to customize the template, fill in the elements, and align it with your retail strategy.
👉 Click here to get instant access to the strategic plan template pre-filled with Costco’s examples.
The Key to Retail Success in 2023: An Execution-Ready Strategic Plan 🚀
In the fast-paced retail world, having a solid strategic plan is crucial, but it's just the first step. The real game-changer is executing that plan flawlessly. That's where Cascade comes in to revolutionize the traditional approach to strategic retail management and strategic planning. With Cascade, you can turn your vision into a tangible and actionable plan that's ready to be executed.
So what are you waiting for? Get ready to soar to new heights and connect the dots between planning and execution with Cascade.
Start today with a free forever plan or book a guided 1:1 tour with one of our Cascade in-house strategy execution experts.
Retail Strategic Planning FAQs
What is the retail mix?
The retail mix is a combination of elements that retailers use to create a unique shopping experience and meet the needs of their customers. It includes seven elements, also known as the 7 Ps of retail marketing: product, price, promotion, place, people, process, and physical evidence. By examining each of the 7 Ps and considering how they align with the overarching business strategy, retailers can create a cohesive plan for growth and successful retail positioning.
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