Retail strategy blc ric anderson 4.28.13

by

RIC ANDERSON

RETAIL STRATEGY FIND THE BEST CUSTOMER FOR YOUR BUSINESS!AND MAKE IT WORK!

RETAIL STRATEGY : FIND THE BEST CUSTOMER FOR YOUR BUSINESS!2

COURSE OBJECTIVES:COURSE OBJECTIVES:

Understand the processes to create a Retail StrategyUnderstand the processes to create a Retail Strategy

with a Customer Centric Focuswith a Customer Centric Focus

Learn to analyze your business and competition from Learn to analyze your business and competition from

a multi-dimensional point of view.a multi-dimensional point of view.

Refine your “Brand” and “Customer Value” Refine your “Brand” and “Customer Value” PropositionsPropositions

Build your strategy on a strong foundation Build your strategy on a strong foundation


MURPHY'S LAW OF MANAGEMENT STRATEGY MURPHY'S LAW OF MANAGEMENT STRATEGY

Some people manage by the book, even though they don't know

who wrote the bookor even what book.


STRATEGYSTRATEGYWHAT IS THE DEFINITION OF BUSINESS

STRATEGY?


STRATEGYSTRATEGYTHE DEFINITION OF BUSINESS STRATEGY IS:

A LONG TERM PLAN OF ACTION DESIGNED TO ACHIEVE A PARTICULAR GOAL OR SET OF

OBJECTIVES


AGENDAAGENDA

Frame of ReferenceFrame of Reference

Visit the “3 Stages” of Strategy Timeline & Visit the “3 Stages” of Strategy Timeline &

PathPath

Breakdown “Stages” into ProcessesBreakdown “Stages” into Processes

Finalize and ExecuteFinalize and Execute


WHAT IS THE PURPOSE OF A WHAT IS THE PURPOSE OF A BUSINESS?BUSINESS?


EVERY BUSINESS HAS A “PURPOSE!EVERY BUSINESS HAS A “PURPOSE!

THAT PURPOSE IS TO PROVIDE THAT PURPOSE IS TO PROVIDE A PRODUCT OR SERVICE A PRODUCT OR SERVICE WHERE THE CUSTOMER HAS WHERE THE CUSTOMER HAS

A PERCEIVED VALUE! A PERCEIVED VALUE!

KEY PIECE KEY PIECE OF THE OF THE

PUZZLEPUZZLE


WHAT IS YOUR PURPOSE?WHAT IS YOUR PURPOSE?

WHAT SANDBOX ARE YOU PLAYING IN?WHAT SANDBOX ARE YOU PLAYING IN?


JCPENNEY’S IS THE PERFECT EXAMPLEJCPENNEY’S IS THE PERFECT EXAMPLE


CURRENT STATE:CURRENT STATE:Your system is perfectly designed to produceYour system is perfectly designed to producethe results that you are getting today. the results that you are getting today.

LESSON:LESSON: If you want fundamentally and If you want fundamentally and substantially different results, You have substantially different results, You have to change the strategy and methodology to change the strategy and methodology of how you are doing business!of how you are doing business!

Insanity: Doing the same thing over and over again And expecting different results.Albert Einstein


12 PILLARS OF STRATEGY12 PILLARS OF STRATEGY

WITHIN THE PILLARS ARE THE TACTICS

THREE STAGES OF BUILDING STRATEGY:THREE STAGES OF BUILDING STRATEGY:

1) Look, Listen, and Learn 2) Evaluate, Collaborate and Test

3) Assemble and Execute


STAGE # 1: STAGE # 1: LOOK, LISTEN, AND LEARN


BUILDING A FOUNDATION: BUILDING A FOUNDATION:

PILLAR NO#1 10,000 FT POINT OF 10,000 FT POINT OF VIEWVIEW

See the “Big Picture”See the “Big Picture”

Know the Market PlaceKnow the Market Place

that you are working inthat you are working in

Understand the relationshipsUnderstand the relationships


POINT OF VIEW

LOOK FOR YOUR BEST CUSTOMERSLOOK FOR YOUR BEST CUSTOMERS Understand who your competition really is and Understand who your competition really is and

what the do bestwhat the do best Profitable “Market Niches” GrowthProfitable “Market Niches” Growth High ROIHigh ROI ““Best in Class” and “Top of Mind” Best in Class” and “Top of Mind” Innovative Positive Customer Touchpoints.Innovative Positive Customer Touchpoints. High Productivity Revenues ChannelsHigh Productivity Revenues Channels FlexibleFlexible Smooth Transition Smooth Transition Least RiskLeast Risk



PILLAR NO# 2 CUSTOMER CENTRIC CUSTOMER CENTRIC FOCUSFOCUS


CUSTOMER PROFILECUSTOMER PROFILEKNOW AND UNDERSTAND YOUR CUSTOMERKNOW AND UNDERSTAND YOUR CUSTOMER

Current Customer?Current Customer?

Analytics?Analytics?

Population of the Market? Population of the Market?

Filters and Segments?Filters and Segments?

Preferred Customer?Preferred Customer?

Alternative Customer?Alternative Customer?


CUSTOMER PURCHASING DECISION CUSTOMER PURCHASING DECISION

LASER FOCUS ON THE CUSTOMERLASER FOCUS ON THE CUSTOMER

CUSTOMER TOUCHPOINTSCUSTOMER TOUCHPOINTS Visual, Physical or MentalVisual, Physical or Mental


BUILDING A FOUNDATION: BUILDING A FOUNDATION: PILLAR NO# 3 MULTI-DIMENSIONAL MULTI-DIMENSIONAL

SOLUTIONSSOLUTIONSEvaluate multiple “Solutions” to your Strategy. Evaluate multiple “Solutions” to your Strategy.

Build a Strategy that can create growth, is profitable,Build a Strategy that can create growth, is profitable,

sustainable, scalable, integrated, defendable, andsustainable, scalable, integrated, defendable, and

has competitive supremacy.has competitive supremacy.

Can easily be communicatedCan easily be communicated


CRITICAL PATHCRITICAL PATH

Predetermined set of Processes and Predetermined set of Processes and TimelinesTimelines

SEEK OUT, SURFACE AND RESOLVESEEK OUT, SURFACE AND RESOLVE


CRITICAL THOUGHT PROCESSCRITICAL THOUGHT PROCESS

THE “CRITICAL THOUGHT PROCESS” THE “CRITICAL THOUGHT PROCESS” IS THE PATHWAY TO A SOLUTION!IS THE PATHWAY TO A SOLUTION!


CHAMPIONCHAMPION

A Senior Executive has to be given A Senior Executive has to be given Authority:Authority:

Gather Data & Collect Information Gather Data & Collect Information Ask difficult & hard questionsAsk difficult & hard questions Request other’s time & assetsRequest other’s time & assets Conclusion and ExecutionConclusion and Execution

RequirementsRequirements ListenListen Open MindOpen Mind Qualitative and Quantitative Skill SetsQualitative and Quantitative Skill Sets


POWER OF CULTUREPOWER OF CULTUREASSETS: ASSETS: PEOPLE AND CULTURE PEOPLE AND CULTURE

ENVIRONMENT ENVIRONMENT is one of trust, engagement, is one of trust, engagement, learning,learning,

communication, listening and cooperation!communication, listening and cooperation!

LEADERSHIPLEADERSHIP is at all levels! is at all levels!

RESPONSIBILITYRESPONSIBILITY for own role! for own role!

ALL SECTORS ALL SECTORS to be utilizedto be utilized

ENGAGEMENTENGAGEMENT has to be total! has to be total!

CONTINOUS INNOVATIONCONTINOUS INNOVATION is top of mind in all is top of mind in all sectors!sectors!


PILLAR NO# 4: ENGAGED CULTUREENGAGED CULTURE



PILLAR NO# 5: INTERNAL AND COMPETITIVE INTELLIGENCE

MARKETPLACE MARKETPLACE Which Marketplace?Which Marketplace?

What Products? What Products? Value?Value?

Channels of RevenueChannels of Revenue

WHERE AND WHAT IS YOUR SANDBOX?WHERE AND WHAT IS YOUR SANDBOX?

25

INTERNAL INTELLIGENCEINTERNAL INTELLIGENCEANSWERSANSWERS ARE WITHIN THE ORGANIZATION ARE WITHIN THE ORGANIZATION

SOLUTIONSSOLUTIONS TO SURFACE IS THE ISSUE. TO SURFACE IS THE ISSUE.

CROSS FUNCTIONAL SUPPORT GROUPSCROSS FUNCTIONAL SUPPORT GROUPS

INTERVIEWS: INTERVIEWS: INDIVIDUAL AND GROUPINDIVIDUAL AND GROUP

INTEGRATED STRATEGYINTEGRATED STRATEGY

RETAIL STRATEGY : FIND THE BEST CUSTOMER FOR YOUR BUSINESS!


VENDOR COMMUNITYVENDOR COMMUNITYMOST UNDERUTILIZED ASSETMOST UNDERUTILIZED ASSET

Vendor Conference Vendor Conference Products Marketing Logistics Customer Experience Competition Innovative Solutions Invite Cross-Functional Support members


COMPETITION: Competitive COMPETITION: Competitive IntelligenceIntelligence

WHO? UNDERLYING COMPETITORS?WHO? UNDERLYING COMPETITORS?

““BEST IN BEST IN

CLASS”CLASS”


TEAM PROJECTTEAM PROJECT

MERCHANDISINGMERCHANDISING

STORES STORES

CHANNELSCHANNELS

CROSS FUNCTIONALCROSS FUNCTIONAL

SENIOR TEAM MEMBERSSENIOR TEAM MEMBERS

TRUSTED VENDORSTRUSTED VENDORS


PILLAR NO# 6: COLLABRATECOLLABRATE


FINANCIAL and OPERATIONAL GOALS

Plans vs. Current StatePlans vs. Current State

“Work Sessions” with Finance, Merchants, Operations etc.

Competitive Intelligence Competitive Intelligence

Where are the opportunities?Where are the opportunities?


PILLAR NO# 7: IN-DEPTH ANALYSISIN-DEPTH ANALYSIS


PRODUCT CATEGORY REVIEWPRODUCT CATEGORY REVIEW

MARKET SHARE MARKET SHARE

FINANCIAL ANALYSIS FINANCIAL ANALYSIS

ANALYSIS BY PRODUCT FILTERS ANALYSIS BY PRODUCT FILTERS

COMPETITIVE ADVANTAGES COMPETITIVE ADVANTAGES


PRODUCT CATEGORY REVIEWPRODUCT CATEGORY REVIEWMARKET SHARE MARKET SHARE

MARKET SHARE BY COMPETITOR

PRODUCTS Comp. 1Comp. 2 Comp. 3 Comp. 4 Comp. 5Women's 10.0% 8.0% 4.0% 7.0% 6.0%Men's 4.0% 6.0% 8.0% 5.0% 4.0%Kids 5.0% 8.0% 7.0% 5.0%Footwear 8.0% 6.0% 7.0%Accessories 8.0% 6.0% 5.0% 1.0% 3.0%Intimate 6.0% 5.0% 4.0% 2.0%Fine Jewelry 5.0%Home 4.0% 7.0% 6.0%


PRODUCT CATEGORY REVIEWPRODUCT CATEGORY REVIEW

ADDITIONAL ELEMENTS: ADDITIONAL ELEMENTS: Inventory – Turn – ROI Inventory – Turn – ROI Sales Sq. Ft. GM$ Sq. Ft., Sales Sq. Ft. GM$ Sq. Ft., Marketing SpendMarketing Spend% of each element per month & year % of each element per month & year

BREAKDOWN: Women’s, Men’s, Kids, Athletic, WorkBREAKDOWN: Women’s, Men’s, Kids, Athletic, Work

FINANCIAL ANALYSIS SHOES 1,000,000s

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTALSALES Reg 20$ 25$ 40$ 30$ 30$ 30$ 20$ 35$ 45$ 40$ 40$ 45$ 400$

Markdown 30$ 20$ 20$ 10$ 15$ 25$ 20$ 25$ 30$ 15$ 25$ 35$ 270$

TOTAL 50$ 45$ 60$ 40$ 45$ 55$ 40$ 60$ 75$ 55$ 65$ 80$ 670$

GM$ Regular 10$ 13$ 20$ 14$ 14$ 14$ 10$ 16$ 20$ 20$ 19$ 20$ 189$

Markdown 8$ 3$ 2$ 4$ 5$ 8$ 6$ 5$ 3$ 5$ 8$ 9$ 64$

TOTAL 17$ 16$ 22$ 18$ 19$ 21$ 16$ 21$ 23$ 25$ 27$ 29$ 253$

GM% Regular 48% 52% 50% 48% 45% 45% 48% 45% 45% 50% 48% 45% 47%

Markdown 25% 15% 10% 35% 35% 30% 30% 20% 10% 35% 30% 25% 23%

TOTAL 34% 36% 37% 45% 42% 38% 39% 35% 31% 46% 41% 36% 38%


PRODUCT CATEGORY FILTERS: PRODUCT CATEGORY FILTERS: MARKET BASKET

DEEP DIVE into multiple combinations of data

MARKET BASKETWOMEN MEN SHOESTOTAL Dresses Sport Denim JR TOTAL Suiting Sport Denim YM Work TOTAL Women Kids ATH Men's Work

WOMENTOTAL 100% 30% 60% 40% 25% 40% 10% 30% 30% 15% 5% 60% 65% 40% 30% 30% 10%Dresses 30% 100% 40% 30% 15% 10% 8% 15% 20% 5% 1% 30% 50% 10% 7% 12% 3%Sport 60% 40% 100% 75% 40% 40% 5% 25% 30% 15% 2% 50% 60% 20% 10% 15% 4%Denim 40% 30% 75% 100% 25% 25% 5% 3% 30% 25% 10% 60% 60% 25% 15% 10% 5%JR 25% 15% 40% 25% 100% 20% 1% 15% 20% 20% 1% 40% 35% 30% 25% 5% 1%

MEN TOTAL 40% 10% 40% 25% 20% 100% 40% 80% 50% 35% 50% 40% 25% 40% 30% 40% 30%Suiting 10% 8% 5% 5% 1% 40% 100% 60% 40% 20% 20% 30% 20% 20% 20% 30% 25%Sport 30% 15% 25% 3% 15% 80% 60% 100% 50% 30% 25% 40% 25% 35% 25% 40% 30%Denim 30% 20% 30% 30% 20% 50% 40% 50% 100% 45% 35% 40% 15% 30% 30% 40% 35%YM 15% 5% 15% 25% 20% 35% 20% 30% 45% 100% 10% 25% 10% 10% 25% 25% 10%Work 5% 1% 2% 10% 1% 50% 20% 25% 35% 10% 100% 30% 8% 15% 20% 30% 80%

SHOES TOTAL 60% 30% 50% 60% 40% 40% 30% 40% 40% 25% 30% 100% 65% 40% 30% 35% 25%Women's 65% 50% 60% 60% 35% 25% 20% 25% 15% 10% 8% 65% 100% 60% 40% 30% 30%Kids 40% 10% 20% 25% 30% 40% 20% 35% 30% 10% 15% 40% 60% 100% 30% 45% 40%Athletic 30% 7% 10% 15% 25% 30% 20% 25% 30% 25% 20% 30% 40% 30% 100% 50% 40%Men's 30% 12% 15% 10% 5% 40% 30% 40% 40% 25% 30% 35% 30% 45% 50% 100% 80%Work 10% 3% 4% 5% 1% 30% 25% 30% 35% 10% 80% 25% 30% 40% 40% 80% 100%


PRODUCT CATEGORIES FILTERSPRODUCT CATEGORIES FILTERSANALYSIS OF EACH CATEGORYANALYSIS OF EACH CATEGORYLocalization Localization

Time PeriodTime Period

Product to Market Channel/Path Product to Market Channel/Path

Marketing: Product & ChannelMarketing: Product & Channel

““Purple Cow” Viewpoint Purple Cow” Viewpoint


MARKETINGMARKETINGCUSTOMER REACHED?CUSTOMER REACHED?

MARKETING CHANNELS?MARKETING CHANNELS?

CHANNELS BEST REFLECT CHANNELS BEST REFLECT THE BRAND?THE BRAND?

EFFECTIVENESS BY CHANNEL?EFFECTIVENESS BY CHANNEL?

INNOVATIVE TESTSINNOVATIVE TESTS

SOCIAL MEDIASOCIAL MEDIA

REACH NEW CUSTOMERS?REACH NEW CUSTOMERS?


REVENUE CHANNELS: REVENUE CHANNELS: WHICH ONES FIT YOUR STRATEGY?WHICH ONES FIT YOUR STRATEGY?

STORESSTORES B2C - CATALOG B2C - CATALOG E- E-COMMERCECOMMERCE

B2BB2B WHOLESALE TV WHOLESALE TV


COMPANY HISTORYCOMPANY HISTORY

History: PAST vs. CURRENTHistory: PAST vs. CURRENT

What is driving the Business? What is driving the Business?

Revenue ChannelsRevenue Channels

Competition: old and newCompetition: old and new

Economic Status Economic Status

Changes in Population Demographics Changes in Population Demographics

Technology – Innovation?Technology – Innovation?

Other Elements? Other Elements?



PILLAR NO# 8

SUPREMACY THROUGH COMPETITIVE SUPREMACY THROUGH COMPETITIVE ADVANTAGES ADVANTAGES

BUSINESS WITH THE MOST INNOVATIVEBUSINESS WITH THE MOST INNOVATIVE

COMPETITIVE ADVANTAGES WINS!COMPETITIVE ADVANTAGES WINS!

ProductProduct

Price, Value, Quality etc.Price, Value, Quality etc.

Business ModelBusiness Model

Customer Value PropositionCustomer Value Proposition

Most positive Customer TouchpointsMost positive Customer Touchpoints


COMPETITIVE SUPREMACY COMPETITIVE SUPREMACY BUILDING COMPETITIVE SUPREMACY

COMP. 1 COMP. 2 COMP. 3 COMP. 4 COMP. 5FINANCIAL

ROIMARGIN

SALES

PRODUCTASSORTMENT

QUALITYUNIQUE

BRAND POSITIONHIGH

MIDDLELOW

PRODUCT CHANNELSPEED TO MARKET

GEOGRAPHY

CUSTOMERSERVICE

VALUEENGAGEMENT


STAGE II: STAGE II: EVALUATE, COLLABORATE, AND TESTEVALUATE, COLLABORATE, AND TEST

USE OF MULTIPLE SOURCES USE OF MULTIPLE SOURCES

UNDERSTAND MULTIPLE OPTIONS UNDERSTAND MULTIPLE OPTIONS

CREATED ALTERNATIVE SOLUTIONSCREATED ALTERNATIVE SOLUTIONS

BUILD QUANTIFIABLE TESTS BUILD QUANTIFIABLE TESTS

INTEGRATED STRATEGYINTEGRATED STRATEGY



PILLAR NO# 9: ABILITY TO SYNTHESIZE HIGHLY ABILITY TO SYNTHESIZE HIGHLY QUANTITATIVE AND QUALITTATIVE DATA INTO A QUANTITATIVE AND QUALITTATIVE DATA INTO A LOGICAL CONCLUSIONLOGICAL CONCLUSION


BRAND POSITION, BRAND POSITION, CUSTOMER VALUE PROPOSITION CUSTOMER VALUE PROPOSITION

and and BUSINESS MODELBUSINESS MODEL

BRAND POSITION BRAND POSITION

CUSTOMER VALUE CUSTOMER VALUE PROPOSITION PROPOSITION

(CVP)(CVP)

BUSINESS MODELBUSINESS MODEL

BUILDING A FOUNDATION: BUILDING A FOUNDATION: PILLAR NO# 10: INTEGRATED BRAND INTEGRATED BRAND

STRATEGYSTRATEGY


STAGE III: STAGE III: ASSEMBLE AND EXECUTEASSEMBLE AND EXECUTE REQUIRES THE SKILL OF SYNTHESISREQUIRES THE SKILL OF SYNTHESIS

CREATE STRATEGYCREATE STRATEGYGATHER DATAGATHER DATAALIGN SOLUTIONSALIGN SOLUTIONSINTEGRATE ALL ELEMENTSINTEGRATE ALL ELEMENTS

CROSS FUNCTIONAL SENIOR TEAM CROSS FUNCTIONAL SENIOR TEAM SUMMARIZESUMMARIZEDISCUSSION DISCUSSION HOT BUTTONSHOT BUTTONSCOLLABORATIONCOLLABORATION


LITMUS TEST : LITMUS TEST : SYNTHESIS

BRAND, CVP, BUSINESS MODEL IN SYNC BRAND, CVP, BUSINESS MODEL IN SYNC

PURPLE COW PURPLE COW

INNOVATIVE COMPETITIVE ADVANTAGESINNOVATIVE COMPETITIVE ADVANTAGES

PROFITABLEPROFITABLE

SUSTAINABLESUSTAINABLE

DEFENDABLEDEFENDABLE

SCALABLESCALABLE

INTERNAL ALIGNMENTINTERNAL ALIGNMENT

SUPPORT FROM INDUSTRYSUPPORT FROM INDUSTRY


FINAL STRATEGY: FINAL STRATEGY: The Core Senior Team to the Company mustmake the final decision.

Incorporate as many of the goals as possibleinto a seamless comprehensive and a collaborative Strategy.

Congratulations! You have completed 90% of the Goal.


COMMUNICATIONCOMMUNICATIONCOMMUNICATION IS THE LAST 10% AND MOST CRUCIAL TO SUCCESS OF THE

STRATEGY.

SUCCESS TIED DIRECTLY TO COMMUNICATIONSUCCESS TIED DIRECTLY TO COMMUNICATION

DISSEMINATEDISSEMINATE

ACKNOWLEDGEMENTACKNOWLEDGEMENT

ANTICIPATE ISSUESANTICIPATE ISSUES

CHANGE MANAGEMENTCHANGE MANAGEMENT


PILLAR NO# 11: COMMUNICATION


BUILDING A FOUNDATION: BUILDING A FOUNDATION: PILLAR NO# 12 CONTINUOUS INNOVATION CONTINUOUS INNOVATION THE “STRATEGY” FOR A RETAIL PLATFORM THE “STRATEGY” FOR A RETAIL PLATFORM

IS A LIVING ORGANISM!IS A LIVING ORGANISM!

INNOVATION KEEPS IT HEALTHY!INNOVATION KEEPS IT HEALTHY!


SUMMARYSUMMARY

A STRATEGIC PROCESS THAT CAN BE USED BYA STRATEGIC PROCESS THAT CAN BE USED BY

THE ENTIRE ORGANIZATION. EVERYONE HAS THE ENTIRE ORGANIZATION. EVERYONE HAS

CONTRIBUTED, TAKES OWNERSHIP, CONTRIBUTED, TAKES OWNERSHIP, UNDERSTANDS AND CAN EASILY ARTICULATE UNDERSTANDS AND CAN EASILY ARTICULATE TO OTHERS.TO OTHERS.


ANDERSON’s 12 PILLARS:ANDERSON’s 12 PILLARS: BUILDING A FOUNDATION

1.1. 10,000 FT POINT OF VIEW10,000 FT POINT OF VIEW

2.2. CUSTOMER CENTRIC FOCUSCUSTOMER CENTRIC FOCUS

3.3. MULTI-DIMENSIONAL SOLUTIONSMULTI-DIMENSIONAL SOLUTIONS

4.4. ENGAGED CULTURE ENGAGED CULTURE

5.5. INTERNAL & COMPETITIVE INTELLIGENCEINTERNAL & COMPETITIVE INTELLIGENCE

6.6. COLLABORATECOLLABORATE

7.7. IN-DEPTH ANALYSISIN-DEPTH ANALYSIS

8.8. SUPREMACY THROUGH COMPETITIVE ADVANTAGESSUPREMACY THROUGH COMPETITIVE ADVANTAGES

9.9. ABILITY TO SYNTHESIZE HIGHLY QUANTITATIVE AND ABILITY TO SYNTHESIZE HIGHLY QUANTITATIVE AND QUALITATIVE DATA INTO A LOGICAL CONCLUSION.QUALITATIVE DATA INTO A LOGICAL CONCLUSION.

10.10.INTEGRATED BRAND STRATEGYINTEGRATED BRAND STRATEGY

11.11.COMMUNICATIONCOMMUNICATION

12.12.CONTINUOUS INNOVATIONCONTINUOUS INNOVATION


Do not repeat the tactics which Do not repeat the tactics which have have

gained you one victory, but let your gained you one victory, but let your methods be regulated by the infinite methods be regulated by the infinite variety of circumstancesvariety of circumstancesSun Tzu c. 490 BC, Chinese military strategist

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Retail strategy blc ric anderson 4.28.13

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